Funding outside the box – peer to peer campaign secures £1.5 million for anaerobic digestion plant
BioDynamic UK has received £1.5 million in funding for a new anaerobic digestion plant in Nottinghamshire, UK, through peer to peer investment.
After being rejected 25 times in attempts to secure funding for the construction of the plant, BioDynamic UK turned to peer-to-peer funding specialists F&P for support. Within two weeks the renewable energy project had secured the £1.5 million it required to begin work on the anaerobic digestion plant.
BioDynamic UK’s owner, Maxwell Bagnall, explained the challenges of securing funding for renewable energy projects in a press release from F&P. “In our industry we have to be fast-moving otherwise subsidies and grants will expire and opportunities will be missed.”
“Traditional lenders see the risk as being too high, but are more comfortable once the facility has been built. This means that short-term funding through P2P works in the early stages, and because F&P does not penalise a borrower for early settlement, the loans can be repaid using traditional bank finance when the reduced risk of an established business satisfies the banks’ strict lending criteria.”
Peer to peer lending allows individuals to borrow and lend money without using an official financial institution. Supporters of the system say it gives borrowers access to financing sources that they might not have been able to secure through standard institutions, while lenders can generate more income in the form of interest. Critics say P2P lending carries greater risk for lenders, and has higher interest rates for borrowers.
The construction phase of BioDynamic’s plant has now been completed, and the company has since secured additional funds of nearly £750,000 to expand the plant further and increase its power output to 2.5MW. This means it now has the capacity to treat 150,000 tonnes of food waste every year, and turn that waste into electricity for the local area.