Fintech, meet clean energy.
CoPower, a platform that raises investment money and makes loans to clean energy projects, has raised $300,000 from Fondaction CSN.
The Montreal-based startup helps raise and deploy capital for pricey clean energy projects. Specifically it collects investment in community-scale clean energy projects that generate “measurable carbon reductions and strong financial returns.” It also has offices in Toronto.
CoPower is another startup company taking advantage of new rules from the Autorité des marchés financiers (AMF) that allow individual, non-accredited investors to contribute money to projects.
CoPower offers “green bonds,” which, pooled together, raise money for solar, geothermal and energy-efficiency projects. These include infrastructure projects like LED lighting in condos, solar rooftops and LED street lighting.
The five-year bond, the first of its kind in Canada, offers a five per cent annual return, compared to less than two per cent for GICs and Canada Savings Bonds. Those looking to buy a Green Bond typically have to do so in $5,000 increments. It’s pricey for an individual, but the bonds can be held in self-directed RRSP, tax-free savings and other registered accounts.
Its first offering of retail-accessible green bonds was offered earlier this year and sold out within a matter of weeks. CoPower’s second Green Bond offering is expected to be announced within the coming months.
Meanwhile, CoPower’s new funding round from Fondaction CSN will help CoPower grow larger. The company’s president Raphael Bouskila told us the next smallest investment round that Fondaction CSN had ever done was $5 million.
“It speaks a little to the fact that they were excited to work with us and hopefully have plans for more in the future,” he told MTLinTECH. “They’re probably the leading brand in socially responsible investing, so it was a great fit.”
“Our goal is to democratize access to clean energy investment products that meet the financial needs of all types of investors while serving the dual purpose of tackling climate change,” added David Berliner, CoPower’s CEO. “Fondaction’s investment gives us additional resources to scale quickly and strategically and to deliver on that vision.”
Originally mandated by the Quebec Legislature, Fondaction supports companies working toward creating a greener and more equitable economy. It has also invested in companies within the low carbon economy like Coop Carbone and Energère, an energy efficiency firm.
“CoPower’s approach towards green infrastructure funding democratization and their recognized expertise in crowdfunding demonstrate that they are natural partners for us,” said Fondaction CSN’s Geneviève Morin.
CoPower previously raised a round of equity funding in late 2015, led by Innovation Support and RBC. Thus far the company says it has raised and deployed nearly $6 million for clean energy project loans across North America. In total it has $7.3 million in assets.
Investors are getting both an economic benefit in terms of investing in energy efficiency, as well as the environmental benefit of reduced carbon emissions, according to Bouskila.
CoPower’s typical investment into the projects is between $500,000 and $3 million.
And for those individuals interested in investing, CoPower says its Green Bonds are fairly low-risk.
“We really put a lot of analysis and security behind the bonds, so compared to other types of risk its a pretty good return.”