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Oxford City Council admits risk over £2.3m loan to Low Carbon Hub
9:30am Thursday 12th June 2014 in News
MORE than £2m of public money is being invested into a renewable energy company despite Oxford City Council’s finance boss admitting it might not get all the money back.
It is loaning £2.3m to community-based social enterprise Low Carbon Hub , which is issuing shares later this year.
But the council’s head of finance, Nigel Kennedy, said the “main risks” were the share issue might not take off and the council might not receive its total investment back.
Mr Kennedy yesterday told the council's executive the loan was “short term” and would generate about £34,000 in interest. Although that represents a simple return of 1.5 per cent, he argued the annualised rate of return was 5 per cent.
He told the Oxford Mail the hub start drawing down the funds this month at staggered intervals over six months. The £2.3m is to be repaid at the end of the six months.
Although the projects – installing solar panels for schools and businesses around Oxfordshire – will start in June, the share issue is not expected to be held until September or October, he said.
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