How it works

We make it easy for councils to set up and run a municipal investment programme through our FCA regulated platform. Our tried and tested processes will help you manage your programme, from the setup and launch of your first loan through to administration.

What are municipal investments?

Our municipal investments are loans to local authorities from citizens and mission-aligned institutional investors. They are designed to be cost-effective and simple to operate, and to fit within your existing treasury management processes.

Municipal investments at a glance

Loans are treated in the same way as other long-term borrowing
They can only be used to finance capital expenditure
All loans are accredited, so funds can only be used for eligible projects
The low cost of operating online and using a templated process means the cost of funds undercuts PWLB (including all Abundance fees)
All administration is managed by the Abundance platform
Raise targets underwritten by mission-aligned institutions

Accreditation

It is important for investors to have confidence in how the funds they invest will be used. This is why we accredit all our municipal investments as Green or Social loans.

We use the Green & Social Loan Principles to govern this process. These principles were developed by the Loan Market Association, along with other international finance associations, to strengthen the integrity of the market by providing a consistent framework. The UK Government has adopted the same approach, using the same Green Loan Principles to underpin its Green Gilt programme.

For municipal investments, verification and accreditation is performed by Abundance. We have designed the process to work within councils’ standard operating model, and it has been reviewed by the Loan Market Association for general compliance.

The four core components of accreditation

Use of funds

The cornerstone of accreditation is how funds will be used.
Intended projects must fall within a pre-determined list of eligible categories.
Projects may be new, or a re-finance of an existing project delivered 12 months prior to launch date of the loan.

Project evaluation and selection

Any project in a council’s capital programme can be funded if it falls within one of the defined categories.
The council should clearly communicate its process for evaluating projects.
The council should also describe the project’s green, social or sustainable objectives.

Management of funds

Funds should be tracked by the council in an appropriate manner.
The tracking should be documented using a formal internal process.
Documentation must link the funds raised to delivery of the eligible projects.

Reporting and verification

Councils should provide regular reports to investors via Abundance.
Reports should explain how funds have been used.
Where possible, reports should include project details, amounts allocated and expected impact.

Eligible green projects

New green energy and renewable heating initiatives, from solar panels on schools to heat pumps and district heating networks.

Schemes that reduce energy use, from improving the efficiency of lighting systems to insulating leaky buildings.

Includes schemes that help residents get around in greener ways. That might include providing public EV charging infrastructure, or upgrading facilities to encourage cycling and active transport.

Projects that promote waste reduction, encourage recycling, or reduce air or water pollution.

Schemes that help residents adapt to climate change, including community infrastructure to deal with more extreme weather events such as floods and heat.

Includes greening projects such as development of parks and schemes that promote biodiversity.

Eligible social projects

Setting up and running a programme

Our aim is to make it as easy as possible for you to run your citizen investment programme, fitting within your existing ways of working. Our tried and tested processes and templated documents will help get everything you need in place to launch your first loan.

We’ll support you in creating engaging plans to communicate the investment to residents. Our investment platform makes all the administration easy, from paying returns to issuing updates.

How the process works

Setup and approval

Updating treasury management strategy
Agreeing terms of business and loan conditions

Due diligence

Complete Due Diligence Questionnaire
Valid for all loans within subsequent 12 months

Preparing a loan

Agree Key Terms
Complete declarations
Agree eligible use of funds
Set the rate

Communications

Support in communications planning
Financial Promotion training
Create content in partnership

Monitoring

Abundance requests fund deployment updates
Ensure compliance with loan conditions

Loan administration

Regular investor updates
Investor interest and capital repayments

Three principles for growing your resident investor community

Think long term

It takes time to build awareness. A 5-year raise target with a programme of loans will boost confidence that this is a long-term initiative, not a one-off, and worthy of consideration as part of citizens’ financial plans.

Plan regular communications

It is important to let citizens know about your programme. Our experience suggests the best strategy for awareness is regular mentions planned across a variety of different communication channels.

Consider project storytelling

Strong storytelling through project selection and ongoing reporting helps to build engagement with citizens. You can focus on landmark projects, but we find it is equally valuable to shine a light on the initiatives that may go unnoticed by citizens. So far, we have found that either approach can be effective.

Request PDF guide to launching a citizen investment

Provide your details to receive a PDF copy of our guide, which contains everything you need to know to launch a municipal investment programme.

Email Address

Organisation name

FAQs

Common questions

Abundance takes a set up fee for each successful raise - a percentage of the raise amount. We also charge an ongoing administration fee which is a percentage of outstanding capital. Abundance ensures the total cost of capital (i.e. interest rate to investors and fees paid) is lower than the PWLB certainty rate, ensuring municipal investments provide the council with value for money.

Specific project selection is not a driver of success. Investors want to know the council has a plan for the improvement of their place, and understand how the projects fit into that plan. There is value in using the investment process to shine a light on projects which are less visible, as well as those that are high-profile. The model has been used to finance everything from pool covers, cycleway improvements, flood defence and ground-mounted solar farms.

As this is not a listed investment there is no additional audit requirement.

Defaults are defined in the standard loan conditions. If an Event of Default occurs and is continuing, Abundance, as agent of the Lenders, may by notice in writing declare all amounts accrued or outstanding under the Loans to be immediately due and payable.

A borrower may repay early by giving 30 business days’ notice of its intention to do so. The borrower must repay the principal amount outstanding, interest accrued up to the day on which the early repayment is made and an “Early Repayment Fee.”

Abundance Investment is authorised and regulated by the Financial Conduct Council (our firm reference is 525432). Our role is to ensure the offer is made in compliance with all relevant FCA rules. The council’s obligation is to be open and honest with Abundance to enable Abundance to ensure that the offer is made in compliance with the rules.

Yes, we expect councils to blend borrowing sources while they are growing their community of lenders. If a project requires a larger amount of finance than can currently be raised through a Municipal Investment, the council can borrow additional finance from PWLB or other traditional lenders to supplement funds raised from their citizens.