Questions and Answers
Q. Has a ‘Community Share Offer’ been tried before?
A. Yes. This sort of Community Share Offer is now becoming an established way of raising finance for renewable energy projects.
Q. Who owns the land on which the AD plant is to be built?
A. The site belongs to Richard and Sadie Tomlinson and will be leased to Lower Park Farm Co-operative.
Q. What is the current status of the project?
A. After 2 years in development the plant is ready for construction, providing we can raise the necessary funds.
The scheme has:-
Q. When will building work take place?
A. The civil engineering needs to be scheduled to coincide with the AD plant build programme.
Q. What is the lifespan of the AD plant?
A. The plant has an estimated life span of 25 years minimum. The concrete footings will be built to last well beyond the initial 25 year period.
Q. How much heat and electricity will the plant generate?
A. The plant is expected to produce 1,790MWh of green electricity and 610MWh of heat each year.
Q. What will be the plant’s operating costs once it is up and running?
A. The plant will incur a maintenance charge, which has been accounted for within the financial calculations, and will require daily feedstock management for which the farmer is responsible and may, therefore, require additional manpower. The plant produces its own power supply.
Q. Who gets the heat and electricity?
A. Lower Park Farm and a group of neighbouring dwellings will receive electricity and heat directly from the AD plant. The amount charged will be equal to the amount that Lower Park Farm Co-operative would have received had the electricity been exported to the National Grid.
Q. Who will manage the project?
A. COWS-Hub Ltd will manage the project and, in its secretarial capacity, will communicate with Members on behalf of Lower Park Farm Co-operative.
Q. Who will run the plant?
A. The day to day running of the AD plant has been subcontracted to the Farmer who is contractually obliged to compensate Lower Park Farm Co-operative if the plant underperforms.
Q. How will revenue be spent by Lower Park Farm Co-operative once the AD plant is fully operational?
A. COWS-Hub Ltd will be paid at cost by Lower Park Farm Co-operative for expenses incurred in managing the Scheme for its duration. The balance of the revenue will fund the payments made to Members.
Q. What happens if Lower Park Farm Co-operative raises enough money before the deadline?
A. Applications for Shares will be processed in the order in which they are received. Should sufficient funds be achieved before the deadline, later applicants will be given priority to invest in the next available community funded project operated by COWS-Hub. All Members will receive priority notification of any new co-operative schemes managed by COWS-Hub as soon as they become available.
Q. What happens if Lower Park Farm Co-operative does not raise enough money?
A. If insufficient funds are raised to finance the project the Board may elect to arrange alternative finance to secure the balance under terms agreed with COWS-Hub; otherwise all monies will be returned.
Q. What happens to my Shares if I die?
A. On the death of a Member their Shares up to £5,000 can be transferred to an individual nominated in writing who qualifies to be a Member of Lower Park Farm Co-operative. Any remaining Shares above the £5,000 will be withdrawn and their personal representatives paid the value of Shares and any outstanding interest as soon as Lower Park Farm Co-operative is able. If you have owned the Shares for more than two years you may be entitled to 100% business property relief on your Shares and therefore not pay any Inheritance Tax on them.
Q. Can I own Shares on behalf of children?
A. You can hold Shares on trust for children. You should seek independent advice on the tax consequences of this.
Q. Will the interest rate vary?
A. No. The interest rate is the same for each Member irrespective of the size of the investment. It will not change except in extraordinary circumstances, for example in the case of failure of the project, winding-up of Lower Park Farm Co-operative, massive market base rate fluctuations, etc. The scheme may pay no interest at all only if the AD plant is a complete failure and Lower Park Farm Co-operative is at risk of being wound up.
Q. How long is the Share repayment period?
A. If the AD plant performs better/worse than predicted, the length of the repayment period may be naturally shortened/extended, but the rate of interest (thus the Member’s rate of return) will remain unaffected.
Q. Can I cash in my Shares?
A. Shares can be withdrawn with 3 months’ notice and with the prior approval of Lower Park Farm Co-operative’s Board.
Q. How do I participate in Lower Park Farm Co-operative?
A. First you can attend one of the briefing sessions that Lower Park Farm Co-operative and COWS-Hub will conduct. This website, together with our Prospectus, provide full details of the Share Offer, but we would advise you to seek independent financial advice should you be uncertain on whether to invest. Applications for Shares must be made using the Application Form provided.