I think you deserve a proper reply to your query. Companies such as this are engaged in financing projects such as wind power and housing that is then rented to UK local authorities. On the face of it, the deal is plausible. They sell bonds (ie take loans from) to members of the public on a short term (5 years) basis to finance construction of these assets. Getting loans from the public can be cheaper than from the banks and allows them much more flexibility.
However, I see lots of warning signs and issues here;
1. they say sector is backed by the UK government. This is only partly true. UK buys wind power at higher then normal rates, but has recently cut these rates. The UK government does not guarantee your investment!
2. the company itself. The site contains no detailed information at all about the promoting company (who are they, past history, financial solidity etc), nor about the company that will eventually get the funds. This is a red card.
3. the loan term. Your money is tied up for 5 years. However this period will not be enough for them to pay off their loans, so you getting your money back in 5 years will depend on them enticing more investors to lend them funds to repay the earlier investment. Given possible falls in future power prices, this is an unnecessary risk to take.
4. website faq. the questions asked are self serving, not the ones that an investor should ask. another warning sign
I would also make the point that 6% to 7% per annum is too low for the level of risk involved and for the fact that this investment, even if it turns out ok, will be totally illiquid. I think there is a high risk that you wouldnt get paid back after 5 years but that they might try to roll over the loans. For comparison in the energy sector, Big Oil is paying 3%-5% dividends at present which are more more secure and completely liquid. Of course, you have the risk of your investment gaining or losing capital over time, but such risk of loss, in my opinion is much less than the type of investment you are discussing.
