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Oakapple Berwickshire

Return 7.5% IRR
Term 19 yrs and 10 mths
Total Invested £1.73m
844  investors
Maturity date 31 Mar 2035
thumbnail of Oakapple Berwickshire

Late payment

This investment has an overdue payment to investors. Please see the Updates section to see more information on the cause of the late payment and the company's current plans to resolve the late payment.

What does the company do?

Oakapple Berwickshire plc is a company set up to own and manage a portfolio of roof-mounted solar PV systems installed on the rooftops of properties owned by Berwickshire Housing Association. The project came about as a partnership between the directors and shareholders of Oakapple Renewable Energy Ltd and Edison Energy Ltd, one of the first solar PV developers selected by the Scottish Government to work with social housing providers.

The portfolio owned by Oakapple Berwickshire includes solar PV installations across more than 400 homes owned by Berwickshire Housing Association, totalling just under 1,450 kWp. Berwickshire Housing Association entered into an agreement with Oakapple Berwickshire which gave it the option to take out leases over the roof space of homes in the Association’s portfolio. Under the terms of those leases, Berwickshire Housing Association as landlord permits Oakapple Berwickshire to use the rooftops of certain homes in its portfolio to install and maintain PV systems with the right to receive the Feed-in Tariffs from those systems. In return, Berwickshire Housing Association has the right to use the electricity generated from those systems free of charge, the benefit of which is passed to the tenant.

The solar PV systems are accredited for the Feed-in Tariff scheme, which pays a fixed amount (rising annually with inflation) for each unit of electricity generated, plus an additional amount for the electricity exported to the grid. The company can choose to opt out of the export Feed-in tariff and instead agree a contract with an energy supplier when wholesale electricity prices are higher.

Why did the company raise money?

The money raised in this investment offer was used to refinance the installation of approximately 1,450 kWp of rooftop solar PV on homes owned by Berwickshire Housing Association.

How does the company expect to repay the investment?

Oakapple Berwickshire expects to repay investors from revenues it earns over the life of the investment from the generation and sale of electricity from its solar PV portfolio.

How is the company making an impact?

Oakapple Berwickshire is helping to increase the amount of renewable energy used in the UK’s electricity grid as we transition to a 100% low carbon energy future, as well as lowering energy bills for the tenants of the homes.

A roof-mounted solar PV system installed on a retirement home owned by Berwickshire Housing Association
A roof-mounted solar PV system installed on a retirement home owned by Berwickshire Housing Association

Key terms

Issuer Oakapple Berwickshire
Return 7.5% IRR
Term period 19 years and 10 months
Start date 1 June 2015
Maturity date 31 March 2035
Capital repayment Regular instalments
Amount raised £1,728,593.29
Return structure

The interest and capital is paid every 6 months (the first interest period was only 4 months long). In each year an equal instalment of capital is repaid, plus an amount of interest that increases each year.

Each year, the amount due to investors in terms of interest and capital repayment is split between the two semi-annual payments 70%/30% for the December and June payments respectively. This is due to the increased irradiation (sunlight) over the summer months which means the company has higher revenues over that period.

Secured or unsecured Unsecured
Early repayment options

The company can only make an early repayment of the investment in certain circumstances, such as a change of control of the company (for example, if some or all of the company was sold to a new owner) or a regulatory/tax requirement.

See the Debenture Deed for details of all circumstances in which the option for early repayment may be exercised.

Documents

Debenture Deed
Download PDF The debenture deed sets out the legal agreement and terms for this investment.

Payment schedule

This table gives a breakdown of what is due to be paid back on this investment, based on an example investment of £1,000.

Late payment

This investment has an overdue payment to investors. Please see the Updates section to see more information on the cause of the late payment and the company's current plans to resolve the late payment.

Payment schedule table
Payment date Capital repayment Interest Total
9 December 2015 £35.00 £23.10 £58.10
9 June 2016 £15.00 £9.90 £24.90
9 December 2016 £35.00 £23.86 £58.86
9 June 2017 £15.00 £10.22 £25.22
8 December 2017 £35.00 £24.64 £59.64
8 June 2018 £15.00 £10.56 £25.56
7 December 2018 £35.00 £25.48 £60.48
7 June 2019 £15.00 £10.92 £25.92
9 December 2019 £35.00 £26.32 £61.32
9 June 2020 £15.00 £11.27 £26.27
9 December 2020 £35.00 £27.16 £62.16
9 June 2021 £15.00 £11.64 £26.64
9 December 2021 £35.00 £28.07 £63.07
9 June 2022 £15.00 £12.32 £27.32
9 December 2022 £35.00 £28.98 £63.98
9 June 2023 £15.00 £12.42 £27.42
8 December 2023 £35.00 £29.96 £64.96
7 June 2024 £15.00 £12.84 £27.84
9 December 2024 £35.00 £30.94 £65.94
9 June 2025 £15.00 £13.26 £28.26
9 December 2025 £35.00 £31.99 £66.99
9 June 2026 £15.00 £13.71 £28.71
9 December 2026 £35.00 £33.04 £68.04
9 June 2027 £15.00 £14.15 £29.15
9 December 2027 £35.00 £34.09 £69.09
9 June 2028 £15.00 £14.61 £29.61
8 December 2028 £35.00 £35.21 £70.21
8 June 2029 £15.00 £15.08 £30.08
7 December 2029 £35.00 £36.40 £71.40
7 June 2030 £15.00 £15.60 £30.60
9 December 2030 £35.00 £37.59 £72.59
9 June 2031 £15.00 £16.11 £31.11
9 December 2031 £35.00 £38.85 £73.85
9 June 2032 £15.00 £16.65 £31.65
9 December 2032 £35.00 £40.11 £75.11
9 June 2033 £15.00 £17.19 £32.19
9 December 2033 £35.00 £41.44 £76.44
9 June 2034 £15.00 £17.76 £32.76
8 December 2034 £35.00 £42.84 £77.84
8 June 2035 £15.00 £18.35 £33.35
Total £1,000.00 £914.63 £1,914.63

Updates

These updates tell the story of the investment over its life and include information reported to investors by the company or council behind the investment. The updates are provided for informational purposes only and do not constitute an inducement or invitation to invest. Information provided at the time of publishing may no longer be accurate.

Please read the full update here.

In this period Oakapple Berwickshire has made two payments, in line with the update provided to investors in November.

The first payment made was the outstanding capital repayment due from June 2023, plus default interest of approximately £1k on this overdue amount.

The second payment was the capital repayment due in this period, plus some of the interest due for this period - approximately £21k. There is therefore approximately £31k of interest that remains outstanding for this period.

Dear investor,

Over the last few months we have put significant time into understanding the Oakapple Berwickshire solar PV portfolio's operational and financial performance as well as implementing measures to resolve some of the issues identified.

We have not hit electricity generation forecasts for a number of years which has led to reduced income and an increasing squeeze on the company's financial resources to pay for necessary repairs and maintenance. While the Oakapple group has provided some support, recently this has not been possible and this resulted in our inability to pay in full the previous Cash Return in June this year. The funds were used instead on repairs and maintenance works to sort out the increasing level of faulty systems in the portfolio, with the aim of bringing about longer term stability to the business.

We are pleased to report that these works, including 54 site visits, are now starting to show improved operational performance across the portfolio. The number of faulty systems has reduced from 10% to 5% of the portfolio. There are further works in process (including employing roofing teams to access systems, replacing new meters and communication parts, further site visits, etc) that should see this figure improve further.

We were also struggling to register 11 systems (making up 2% of the portfolio's capacity) for the Feed-in-Tariff ('FiT') subsidy. The administration issue has now at last been unblocked with our FiT provider, Good Energy, and we expect to have these sites registered by the next FiT submission in December — at this point we will obtain a catch up of the FiT income we should have received from their generation since their installation a number of years ago.

The main Oakapple director has also now taken over the day-to-day management of the portfolio and this should ensure this momentum continues. We are therefore confident that the generation performance can get back to levels that make the portfolio sustainable — to meet its debt payments and have sufficient level of cashflow to cover ongoing operational costs and in particular an appropriate cycle of maintenance works.

A number of the repairs to the systems have however only just been performed and we are still in the process of finalising repair works to the remaining 5% of faulty systems. The full benefit of the investment into these Operations & Maintenance works should be evident in the first half of next year.

The financial implication is as follows. On 8th December (the next Cash Return payment due date) we owe Debenture holders approximately £139k made up of:

  • £26k - the unpaid capital repayment due on 9 June 2023
  • £1k - additional interest that has accrued on the overdue capital repayment
  • £112k - the capital and interest due for the Cash Return for that period

We will only be able to pay £108k of the total amount due, which will cover the additional interest owed, the overdue capital amount for the last period, the capital repayment for this current Cash Return period, and a proportion of the interest owed for this period. This means we are having to defer again part (approximately £31k) of the interest that is due to you for this period. The plan is to pay this in April 2024 once the 11 sites on hold are FiT registered and the catch up payment is paid to us.

We will be monitoring the situation closely and will report to you at the next cash return date in June 2024 on the portfolio performance and any further implications on expected future debenture payments.

We are sorry to have to inform investors that we have only been able to make the interest payment proportion of the investment return due today, 9 June 2023.

This is the result of lower generation performance than expected which, after costs including higher than expected repairs and maintenance, has reduced our cashflow significantly.

Previously, any shortfalls in operating cashflow from this portfolio has been able to be covered by group support however we are unable to do so on this occasion.

We expect to make the capital repayment proportion of this investment return from the next Feed-in-Tariff payment in 3 months (or sooner if our group cash flow permits), along with the default interest that we will incur on this overdue payment.

We will shortly be undertaking a restructuring review of Oakapple Berwickshire PLC, including an assessment of the future cashflows in relation to the Debenture payments. Like a large number of businesses at the moment, and despite our inflation-linked revenues, we are struggling with the increasing costs. We will be reviewing all options to us, one of which may include selling the Oakapple Berwickshire portfolio in order to repay your outstanding capital.

We will endeavour to provide a fuller report to you in the next month or so.

An update from Oakapple Berwickshire is expected shortly.

An investment return from Oakapple Berwickshire was paid today.

The delay was caused by a missed Feed-in Tariff (FiT) submission by Oakapple Berwickshire's FiT provider which meant the company only received the income for the electricity generated recently. With the FiT income now received, Oakapple Berwickshire has been able to make the payment due in full.

Investors have received the outstanding interest and capital repayment due on 9 June, plus additional interest on the outstanding amount equal to the Bank of England base rate + 3% over the period it has remained outstanding.

We are sorry to have to inform investors that there will be a delay to the Cash Return payment that is due to you tomorrow, 9 June 2022.

This is due to a missed quarterly Feed-in-Tariff submission by our Operations and Maintenance (O&M) provider which has resulted in a delay to the income we receive for the electricity we generate. It is very frustrating that this has happened as the same issue happened last year and we were assured by our O&M provider that new processes would be put in place to mitigate against this.

The O&M provider has communicated that there have been a number of internal staff changes and has inferred that this is the reason for the error on their part.

The Feed-in-Tariff submission for the electricity generated from the first quarter of the year will now be combined with the submission for the generation from the second quarter of the year at the end of this month. Payment from Good Energy for this will then be received in the first week of September.

We will make the payment of the Cash Return to investors as soon as this revenue is received. It will be paid along with additional penalty interest (3% over the current Base Rate of 1.0% on the overdue amount over the delayed period) as required under the Debenture Deed for late payment of the Cash Return.

We are in the process of scheduling another meeting with the management of the O&M provider to discuss this issue in detail and also the number of faults and communication issues with our systems is still at an unacceptable level, now 9% of the portfolio. The O&M provider is in the process of a push on both physical and remote inspections to bring more of the systems online. It appears that it has struggled with a backlog of inspections caused by Covid and the staff changes which have hindered how efficiently it is able to resolve system issues.

The solar systems generated 90% of the forecasted electricity generation during the period. We are therefore hopeful that once the O&M issues are resolved that the business will be operating in line with our original forecasts.

We would like to apologise again for this frustrating delay and give you our reassurances that we will be in a position to pay the Cash Return as soon as we have received the income from the electricity generated.

Oakapple Berwickshire has informed Abundance that it expects there to be a delay to the payment of the Cash Return that is due on 9 June 2022. The company will provide a further update shortly.

An investment return from Oakapple Berwickshire was paid today.

We apologise for the 14 day delay in paying investors this Cash Return. This was caused by a missed quarterly Feed-in-Tariff submission by our Operations and Maintenance provider which has resulted in a delay to the income we receive for the electricity we generate. The payment to investors includes £54.76 of additional penalty interest (3% + Base Rate on the overdue amount over the delayed period) as required under the Debenture Deed for late payment of the Cash Return.

We are reviewing our O&M providers processes to ensure this does not happen again and also to see how we can quickly resolve the increasing number of faults and communication issues with our systems. The number of systems with such issues has increased to around 8% of the portfolio. The main (Covid related) restriction preventing access to the systems has however recently been lifted and visits to these systems has been scheduled to take place in the next couple of weeks.

There were no other operational issues reported and the solar systems generated 76% of the forecasted electricity generation during the period. Although on the low side, generation is impacted by the fluctuations in the weather and this is not considered abnormal when considering previous seasonal performance.

Due to a delay in Oakapple Berwickshire receiving its Feed-in Tariff payment for the electricity generated during this Cash Return period, there is a delay to today's Cash Return payment. The company will provide further detail on the expected delay shortly.

An investment return from Oakapple Berwickshire was paid today.

An investment return from Oakapple Berwickshire was paid today.

Solar PV systems, once operational, tend to require very little intervention to maintain operations so most of the portfolio is largely unaffected by the impacts COVID-19. However, when our O&M provider does require access to sites to remedy faults or communication issues with the meter this continues to be difficult currently because of shielding and social distancing.

A small part of the portfolio is having communication issues due to the sim cards, which means we are unable to retrieve the meter readings remotely until resolved by a site visit, which is resulting in a lower recorded generation figure for the period. Our O&M provider is working closely with the housing association to develop a safe process to perform site visits, postponing visits to residents which are being shielded, and ensuring sufficient hygiene, PPE and social distancing is in place for other visits.

The Covid-19 crisis has unfortunately impacted the Oakapple Group in that a large part of the Group’s business, which is focused on property development and installing solar PV installations on new build properties, has been affected by the standstill in the construction industry. As a result, a number of staff (including those that help to manage this portfolio) have been furloughed for the time being until things return to some normality. Solar PV installations typically have few maintenance requirements, however for any systems that develop a fault during the general lockdown period we will not be able to send our O&M provider to investigate or make repairs. When it is safe to do so again, we will make arrangements with our O&M provider to resolve any issues. We will keep you updated with any material developments during this difficult time.

The solar systems generated 95.7% of the forecasted electricity generation.

The solar systems generated 93.2% of the forecasted electricity generation.

The solar systems generated 99.7% of the forecasted electricity generation.

There were no operational issues reported and the solar systems generated 79.6% of the forecasted electricity generation.

There were no operational issues reported and the solar systems generated 90.9% of the forecasted electricity generation.

There were no operational issues reported and the solar systems generated 82.9% of the forecasted electricity generation.

There were no operational issues reported and the solar systems generated 91.0% of the forecasted electricity generation.

There were no operational issues reported and the solar systems generated 74.3% of the forecasted electricity generation.

There were no operational issues reported and the solar systems generated 98.9% of the forecasted electricity generation.

This investment closed today.

Oakapple Berwickshire opened for investment today.