OBJECTIVE To raise 313,000 through a share offering, low interest loans and gift aid to fund a community hydro

scheme at Harlaw Reservoir

Numerical Summary
Size of system 65KW Units pa (kwh) 260,000 CO2 Saved Homes Cost 313,000 Annual Revenue 58,000

129 tonnes

56 UK average

source Highland Eco Feasibility Study 2011 (funded by Community Energy Scotland)

Harlaw Hydro Ltd

An Industrial and Provident Society, created for the

Benefit of the Community Can sell shares to raise capital Is a cooperative society owned by its members Has the specific purpose of owning and operating a micro-Hydro scheme Membership of Harlaw Hydro Ltd is open to individuals, corporate bodies, voluntary organisations and public sector investors.

Why do this?
To generate green hydro-electricity and feed it into

the Grid. Commercial viability due to the Feed in Tariff (FiT)

Currently the Government will pay 20.21p per kwh on

top of the standard commercial payment of 3.2p per kwh

To provide support for community projects and

activities.

How can we have income reassurance?

HMG guarantees FiT rates for 20 years from the start

of electricity generation Secure Preliminary Accreditation

From 1 December 2012, prospective installations which

fall into the ROO-FIT application pathway (less than 5MW) are able to apply for preliminary accreditation. This mechanism provides a tariff guarantee provided generation starts within 2 years.

We need to line up 4 ducks to apply for this

The 4 Rubber Ducks to line up

Planning Permission Granted October 2012 Extraction License Granted by SEPA October 2012 Lease agreement Heads of terms approved by CEC March 2013 Grid Connection G59 submitted to Scottish Power March 2013

Community Energy Scotland

Provided the grants for the feasibility studies
Provides advice and contacts to organisations

interested in generating green energy Connected the project with David Hollings of Cooperative and Mutual Solutions Limited

Education
Once the scheme is operational a display explaining

hydro electric generation will be installed in the Pentland Regional Park Rangers Centre. The display will include a screen showing the system at work and what green energy is being generated.

Funding the Project

Funding will be sought from several sources: Through shares in Harlaw Hydro Limited Through donations and Gift Aid to Balerno Village Trust expressly for this purpose Through interest-free loans Through a commercial loan to cover the short fall

Funding Breakdown
Shares in Harlaw Hydro IPS Donations and Gift Aid Interest Free Loans Commercial Loan 150,000 50,000 50,000 63,000

Commercial Loan Options

Co-op and Community Finance 150K @ 6% interest + 1% arrangement fee (includes due diligence) Renewable Energy Investment Fund via Scottish

Investment Bank
150K @ 8% interest

Geocapita private investment company. Working

with Scottish Government to make loans for community energy developments.

The Harlaw Hydro Share Offer

Each share has a nominal value of 50.
The minimum shareholding is 250. Shares have to remain invested for at least 3 years (plus 3

months) after Harlaw Hydro Ltd starts trading (selling power). Shares in Harlaw Hydro Ltd are not transferable in the way that shares in, say, British Gas are, they are termed as withdrawable shares - only the issuer, Harlaw Hydro Ltd, can buy them. Share offer 9th April to 28th June 2013

Level of Interest to Shareholders

The level of interest will be set by the board of Harlaw Hydro annually.
The maximum level of interest is limited to 2% over the

Co-operative Banks base rate or 5%, whichever is the higher. The financial projection assumes 4%

Base Figures and Assumptions

1 2 3 4 5 6 Capital Cost (ref. HE Feasibility Study) Annual Maintenance and Servicing (ref. HE Feasibility Study) Annual increase in Maintenance and Servicing Reserve Fund to cover plant repair and replacement (% of surplus from year 2) Cost of Lease (free for first 6 years) % of income less other costs IPS Share issue 313,000 3,452 4.0% 10.0% 4.0% 150,000

7
8 9

Commercial Loan with a lump sum repayment annually

Interest rate paid on commercial loan Interest rate paid to shareholders

163,000
8.0% 4.0%

10 Approximate income from electricity generated pa (ref. HE Feasibility Study)

11 RPI used in forecasting income 12 Year 1 will only generate 50% of expected annual electricity 13 The Commercial Loan will be repaid over 10 years.

58,000
2.5%

Financial Projection
Year Income
A

Maint. & Serv.

B

Share Loan Interest Payments

C D

Cost of Lease
E

Oper. Costs
F B+C+D+E

Oper. Surplus
G A-F

Available to BVT
H

Capital Reserve
I G-H

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

29,000 59,450 60,936 62,460 64,021 65,622 67,262 68,944 70,667 72,434 74,245 76,101 78,004 79,954 81,952

3,452 3,590 3,734 3,883 4,038 4,200 4,368 4,543 4,724 4,913 5,110 5,314 5,527 5,748 5,978

0 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000

24,292 24,292 24,292 24,292 24,292 24,292 24,292 24,292 24,292 24,292 0 0 0 0 0

0 0 0 0 0 0 1,304 1,364 1,426 1,489 2,525 2,591 2,659 2,728 2,799

27,744 33,882 34,025 34,175 34,330 34,492 35,964 36,199 36,442 36,694 13,635 13,906 14,186 14,476 14,777

1,256 25,568 26,911 28,285 29,691 31,130 31,298 32,745 34,225 35,740 60,610 62,195 63,818 65,478 67,176

0 5,000 10,000 15,000 20,000 25,000 30,000 30,000 30,000 35,000 55,000 55,000 55,000 55,000 60,000

1,256 20,568 16,911 13,285 9,691 6,130 1,298 2,745 4,225 740 5,610 7,195 8,818 10,478 7,176

Why Should I Invest?

Feel Good a social investment Green Energy Community Cooperative Society Provide Funds for community projects and activities through BVT Financial 4% interest compares favourably with Savings Account and cash ISAs 50% tax relief through the Seed Enterprise Investment Scheme

Seed Enterprise Investment Scheme

The sale of electricity is an eligible activity for SEIS HM Revenue & Customs have provided Advance Assurance that shares

in Harlaw Hydro should qualify Shareholders can apply for income tax relief after Harlaw Hydro is earning revenue from electricity generation. The rules for SEIS tax relief

require a minimum investment of 500 for a period of over 3 years set an overall limit of 150k for Harlaw Hydro first come first served Harlaw Hydro to be trading for at least 4 months or to have spent 70%

of the money raised

How it Works 1. Harlaw Hydro is accepted by HMRC under the under SEIS 2. Applications for tax relief are made by the investor to HMRC

NB Harlaw Hydro Limited cannot give guarantees

SEIS Example
Jenny invests 20,000 in the tax year 2012-13 (6 April

2012 to 5 April 2013) in SEIS qualifying shares. The SEIS relief available is 10,000 (20,000 at 50%). Jennys tax liability for the year before SEIS relief is 15,000 which she can reduce to 5,000 (15,000 less 10,000) as a result of her investment.

keepin g you

Trust N ew s
in touc h w ith
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What is BVT? How does it work? What has it done?

No 2

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Trust News
keeping you in touch with Baler no Village Trust
No 1

Trust News is the newsletter of the Balerno Village Trust and aims to provide up to date information on all the Trust's activities, and also the activities of the Trust's sister organisation Harlaw Hydro.

FREE

December 2012

What is BVT?
Company limited by guarantee Registered charity

The Best Market Y et!

Cllr Ricky Henderson presents the Farmers' Market Christmas Hamper to lucky winner Andr ew Hamlett.

Farmers Market, Sustain Balerno (Tattie day, Apple

Day, Community Orchard, Bee Hives etc etc etc), Ravelrig Walled Garden, Hydro .

The verdict on the December Balerno Farmers' Market, held on 8th December? It really was the best yet !
The Market was part of the highly successful 'Balerno Christmas'. It attracted record crowds and included some 20 stalls: 13 regular traders like Falko Bakery, Simon's Pies, Gordon's Arran Cheese and Monarch Venison, alongside 9 local community stalls, including Youth Vision and Balerno High School Young Enterprise. This mixture of commercial traders and local community involvement is one of the features of Balerno Farmers' Market which appeals both to customers and to the commercial traders.
Ravelrig led Gar TheWalstallholders dressed up their stalls for Christmas and den look ing nort h Gordon Macdonald MSP and Cllr Bill Henderson undertook the difult task of selecting the winner of the Best Presented Stall competition: Falko Bakery, with Gordon's Arran Cheeses the runner- up and Youth Vision getting third place. Congratulations to them all!

Su

sta in

Ba le

photo by Ian Gidney

rn o ti d

yin gu The 'Balerno Christmas' weekend also included the 3rd pM ain Christmas Tree Festival and the Concert for Christmas with Str ee t the Broxburn and Livingston Brass Band, with the Mill cafe keeping us warmly refreshed. BVT are now looking at ways in which the success of that weekend can be repeated throughout the year.

What does it aim to do?

Sustainability

Across the country Farmers' Markets are struggling, but BVT hope that the Balerno Market can buck this trend, becoming even stronger than it is at present. Ideas being considered include theming markets to include, for example, an Easter Market or a Harvest Market; perhaps even a Honey Market, once the Sustain Balerno bee-hives have been brought into action, hopefully in the later spring of this year. If you have ideas then please let BVT know . BVT does however need more help with the Farmers' Market and if you would like to get involved then please contact Mike Martin on 0131 449 4545. The Balerno Farmers' Market wishes all its customers, stall Ba le very Happy Christmas and New Year, holders and friends a rn o Ch and looks forward to seeing everyone at our next Market on ris tm Saturday 9 February. a
12 Balerno Farmers' Market - ever y0month except January on the second Saturday, 9.00am to 1.00pm; Balerno Main Street s 2

Community development
Education & health To fund other local people to do the same

Bale rno tow V ards a su illa ge T stai nab le co mm ru st unit Ann y u

g.uk al R epo rt 2 012 / 13 aler nov t.or
Reg iste re Bale rno Re g do Villa iste fc ge red eTru Bale num st S r no ber cott SC3 Pari ish sh C 693 Cha 78 hur rity ch Num Of ber ce, is S 2M C04 ain 331 Str 8 eet, Bale rno

A Christmas Hamper Prize Draw, made up of produce kindly donated by the stallholders, raised over 230 for Syria Aid and the Cyrenians; the Trust is immensely grateful to all who contributed. The Market also featured a number of special events, including virtually non-stop music between 10.00am and 1.00pm, provided by the Dean Park Primary Choir followed by the Choir of Balerno Parish Church, the Balerno High School ww Wind Group and buskers from the Explorer w.b Scout Group.

How does it work?

Board of Directors and sub-groups all made up of

EH1 4

7EH

volunteers

 Whats it done and whats it doing?

Farmers Market, Founding partner in Balerno Music

Festival, Sustain Balerno (Tattie day, Apple Day, Community Orchard, Bee Hives etc etc etc), Ravelrig Walled Garden, Hydro, partner in Balerno Christmas .

What does it aim to do?

Develop and deliver new ideas and projects
Help other groups to develop ideas and projects

which are consistent with BVTs charitable purposes

How will it do that all that?

Income from projects Grants to community bodies via a broad based grants

committee

Interim Board

Lynn Molleson - Director

Many years of experience in the voluntary sector Specialises in developing new projects and community consultation Strong interest in renewable energy and energy efficiency. Experienced Industrial designer Company director Chairman of Balerno Community Council and a director of Balerno Village Trust Chartered surveyor with over 15 years experience working in the commercial property industry. Knowledgeable in planning and property-related development matters Broad experience in raising finance in the commercial sector Director and vice-chairman of Balerno Village Trust Retired IT consultant Successful track record in preparing business cases and delivering projects Director and Treasurer of the Balerno Village Trust Treasurer of the Balerno Music Festival

Ian Hynd Director

Simon Dormer Director

Martin Petty - Company Secretary

 Questions
One to one discussion Application Forms