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Community Energy Fund:

How return of capital works

Return of capital

The Community Energy Fund aims to pay an annual interest, but it does not automatically repay capital on any fixed schedule. As our projects mature and release capital over their operational lives, this money is generally reinvested in new community energy projects or used to meet member withdrawal requests, rather than returned to investors automatically.

In some circumstances, if the capital released from projects is greater than our combined need for new investment and outstanding withdrawal requests, the Board may decide to proactively return capital to members to avoid holding more equity than the Fund needs. As assets reach the end of their working life and release capital, the Board will decide each year how best to use it: reinvestment, member withdrawals, or in some cases a return of capital.

If you’d like to access your capital sooner, the annual withdrawal process below sets out how to apply.

Withdrawal requests

We understand that circumstances can change, so once your investment has been held in the Fund for at least four years, you can apply to withdraw some or all of your capital through our annual withdrawal process.

The capital invested in the Fund is used to support projects with long pay-back periods, with equity tied up in assets rather than held as cash. Therefore our ability to fulfil requests is dependent on the amount of equity withdrawal applied for in any one year, the amount of capital released from our projects and our ability to attract new equity to replace it.

Investors are encouraged to view their investments as a long-term commitment to supporting community energy. This generates long-term financial benefits to you and sustained environmental and social benefit to the community. Although we cannot guarantee to fulfil all requests, we commit to making funding available each year to facilitate some.

Requests to withdraw capital will be met either out of ongoing project income or by raising new equity to replace it. Ultimately, equity withdrawal requests remain at the discretion of the Directors. Please refer to The Low Carbon Hub IPS Limited Rules and Community Energy Fund Guidelines for more information on withdrawing capital.

A note on consolidation of earlier portfolios

Investors in Solar 2014, Solar 2016, and Sandford Hydro originally automatically received their capital back over the lifetime of the projects. However, as of 31 March 2025, all investments were consolidated into the Community Energy Fund. As investors in this Fund, investors do not automatically receive capital repayments, but have the option to request to withdraw their capital.

Timeframe for withdrawal applications

Each year we will open a window for capital withdrawal requests. Applications must be received by the deadline to be considered. The minimum amount for withdrawal is £100 and the maximum is £20,000.

If successful, your capital will be returned within 180 days of the end of the financial year. To cover administration costs, successful applicants will forfeit 90 days of interest.

We cannot guarantee that all capital withdrawal requests will be fulfilled in any one year. Ultimately any withdrawals remain at the discretion of the Board of Directors who have an obligation to put the financial wellbeing of the Low Carbon Hub first.

Should the amount of capital requested in any one year exceed the available capital, we will prioritise requests according to a set criteria, details of which you can find in our Guidelines.

December

Application window opens and investors interested in applying will be asked to complete a short form.

April

Following close of financial year, applicants informed of outcome of their application for capital withdrawal.

September

Successful capital withdrawals are expected to be paid following final decisions from the board.

Key links

If you have any questions on withdrawing shares, please contact members@lowcarbonhub.org.