WHAT ARE UISTWIND AND NORTH UIST DEVELOPMENT COMPANY TRADING LIMITED (NUDC-T)? North Uist Development Company (Trading) Limited is a Community Benefit Society (Reg. no. 7738) established in 2018 to raise funds to develop and run the North Uist Wind Turbine scheme referred to as UistWind.
We have built a 1800kW wind turbine scheme which will create electricity to feed into the National grid and thereby raise funds for the benefit of the North Uist Community. In 2011, this project was identified as a priority for developing the North Uist community. A viable site was subsequently identified on Criongrabhal, near Clachan-na-Luib. The wind turbines are now operational and generating electricity.
WHAT IS A COMMUNITY BENEFIT SOCIETY? A Community Benefit Society is an organisation that operates its business for the benefit of the community rather than just for shareholders or members of the society. Its objectives must have an overarching community purpose and surplus profits are returned to the community it serves.
The Society is owned by its members on the basis of one person / one vote. Although a Community Benefit Society is required by the Financial Conduct Authority to specify the community to be benefited, membership is not restricted to residents of that community. This means that anyone can invest in a Community Benefit Society, subject to its rules.
HOW WERE THE FUNDS RAISED TO BUILD THE WIND TURBINE SCHEME? Funding for the construction of the wind turbine scheme was primarily raised through commercial loans supplemented by the sale of community shares. There are two lenders. A senior lender, Triodos Bank UK, and a junior lender Scottish Investment Bank Energy Investment Fund. A second share offer in the near future will enable the commercial loans to be reduced.
WHAT ARE COMMUNITY SHARES? Community Shares are a funding mechanism to assist the raising of money for sustainable community enterprises that provide goods and services which serve a community purpose.
There is no legal definition of what a community share is but the term refers to a unique form of share capital often called ‘withdrawable shares’; these can only be issued by co-operatives or community benefit societies.
THE COMMUNITY SHARES UNIT (CSU) STANDARD MARK NUDC-T’s wind turbine scheme has been awarded a CSU standard mark. This means the business model, level of community engagement, governance and the share offer document have all been assessed against strict standard criteria. The award means that a licensed CSU practitioner has determined that the society’s plans are specific, measurable, achievable, realistic and timely.
WHAT IS THE DIFFERENCE BETWEEN AN ORDINARY SHARE AND A COMMUNITY SHARE? Community shares provide capital for a community project where investment is primarily for social rather than financial benefit; annual interest on share capital is paid but there is a limit to how much this can be. Unlike ordinary transferable shares that are bought and sold through the stock market, community shares cannot be transferred between people and share values do not change.
Shareholders of community shares have a share account and can increase or decrease their shareholding according to the rules of membership. The value of shares is fixed and not subject to speculation and shareholders have only one vote, regardless of the size of their shareholding. Interest is paid on share capital but the level of this is based on a principle that interest should be no more than is sufficient to attract and retain the investment.
I’M THINKING OF INVESTING - WHY SHOULD I BUY SHARES AND HOW MANY CAN I BUY? The Share Offer is closed, and we will announce on this website when the second Share Offer is opened.
Those buying shares will be largely motivated by a wish to support the wind-turbine scheme and its underpinning social and environmental purpose. Share purchase can also provide a good investment opportunity with an average interest return after the first year of operation expected to be higher than many banks. Interest levels may vary as they are dependent on many factors including annual wind yields.
The minimum share investment in UistWind was £250. The maximum amount was £100,000. Anyone over 16 years could buy shares and adults can purchase shares on behalf of children.
Payment in installments was possible as was purchasing as part of a group (though the group would only get one vote).
HOW MUCH MONEY WAS RAISED BY THE SHARE OFFER? There was a minimum of £350,000 required by the project for it to proceed. A total of £453,850 was raised through the sale of community shares.
WHEN WILL FUNDS BE AVAILABLE FOR COMMUNITY BENEFIT? The total revenue over 22 years is forecast to have an overall surplus of over £2 million available for community benefit and investment in the community. The annual surplus, which will take a few years to become available, will be gifted each year to North Uist Development Company (NUDC) to develop local projects and activities and create a Community Benefit Fund. The process of disbursement of this fund will be determined by further Community Consultation prior to the surplus being generated.
ARE COMMUNITY SHARES REGULATED BY THE FINANCIAL CONDUCT AUTHORITY (FCA)? No. Community Benefit Societies are registered by the FCA but societies are exempt from regulation, under FSMA 2000, for the issue of withdrawable shares.
However, societies carry a responsibility for stringent self-regulation and there is a code of conduct for community share offers carrying the Standard Mark that includes a public right of complaint that is overseen by the Community Shares Unit.
IF I INVESTED, CAN I WITHDRAW MY SHARES? Community shares are known as ‘withdrawable shares’ and can be withdrawn at the request of the shareholder with reasonable notice and if the Society can afford to repay the shares at the time. They cannot be sold or transferred. Any such request will be at the discretion of the Society and subject to the finances at the time of the request.
WILL I GET MY ORIGINAL INVESTMENT BACK? Yes, you should. The intention is that NUDC-T will buy back all the community shares during years 7 to 22 years.
WILL I GET CHEAP ELECTRICITY FROM THE TURBINES? No. At the moment it is extremely difficult and expensive to become a licensed electricity supplier, which is necessary to be allowed to sell electricity direct to the public. However, this scheme is expected to be operational for at least 20 years and during this time this may change.
NUDC-T will aim to keep up to date with developments in the industry and will keep its members informed.
WHAT DO I RECEIVE IN RETURN FOR MY INVESTMENT? • A target interest rate of 4% (gross) per annum • A vote: all members will have one vote each, regardless of how many shares they hold • The right to elect the NUDC-T Board of Directors and to participate in the Annual General Meeting which decides the future and running of the business • The opportunity to become one of the volunteer directors of NUDC-T.
WHERE CAN I FIND FURTHER DETAILS ABOUT THE SHARES? Please read the previous Share Offer Brochure in full; this provides comprehensive and important detail about the Share Offer and the risks and benefits.
DO I HAVE TO COMPLETE AN APPLICATION FORM? Yes, you will need to complete an application form to apply to be an investor once the second Share Offer is opened, along with chosen payment method and either email or post a copy to us.
HAS THIS BEEN DONE BEFORE? It certainly has! The community wind farm model has been created time and again across the Outer Hebrides and projects are successfully putting their profits back into communities for the benefit of all. Visit Horshader Community Development or Point and Sandwick Trust to see what’s already happening across the Western Isles.