A PILOT project could soon see West Berkshire Council issuing £1 million of bonds to fund projects to tackle the climate crisis. 

The money could be used to pay for cycle lanes, solar panels and other infrastructure that reduces carbon emissions. 

The council would take part in a pilot where it would borrow money from investors to help fund reaching carbon neutral by 2030. 

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Councillors will vote on whether to approve the pilot at a meeting of the executive on December 19. 

Currently the council borrows money from the national government — specifically the public works loan board (PWLB). But issuing bonds directly could save the council money, according to Joseph Holmes, executive director of resources. 

For example, over five years taxpayers could save £10,000 on the cost of borrowing £1 million, if infrastructure was funded through local climate bonds instead of the PWLB. 

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Mr Holmes explained, in a report to the executive, this alternative source of funding would not be at risk to sudden changes in the PWLB borrowing rate — like how the treasury in October suddenly increased the amount that PWLB loans cost by one percentage point. 

Following a successful pilot, the scheme could be ramped up to pay for infrastructure projects in the forthcoming environment strategy — the plan to get West Berkshire to carbon neutral by 2030; a draft of which will be published in January. 

Abundance, an investment company, would administer the scheme. Investors across the country would invest in a bond specific to West Berkshire Council. 

Mr Holmes said: “This is a rare opportunity to be part of a scheme such as this at its inception.

“The bond is issued to residents and investors from across the country to receive a percentage return on their capital for the investment.” 

The council declared a climate emergency in July 2019 and pledged to work towards getting West Berkshire carbon neutral by 2030. The European Union would fund up to £25,000 to pay for the pilot and due diligence ahead of any bond issues. 

Mr Holmes estimated there is a market of £1.8 billion potential investors across the south east of England. 

He said: “It should also be attractive as we are a very safe haven for investors as we would be seen as equivalent to sovereign levels of financial risk, but offering an attractive return to the investor.

“The investment would have a very strong social and ethic basis, which is becoming increasingly important to the financial market and individuals.”