We help you make investments that matter. Here are the details.
Please note that many of the answers provided below are summarized or simplified for the benefit of prospective investors. Before investing in CoPower Green Bonds, all investors should review CoPower's Green Bond Offering Memorandum (issued January 31, 2020.) which provides all material facts relating to the offering of CoPower Green Bonds.
Updated January 31, 2020.
Impact and responsible investing
What is impact investing?
Impact investing is a strategy that involves investing in companies, projects or financial products with the intention of generating measurable, positive social and environmental benefits alongside financial returns.
What is the difference between responsible investing and impact investing?
While responsible investing strategies often involve applying a passive screen, such as avoiding investment in harmful companies or sectors, for example tobacco, weapons or fossil fuels, impact investing actively seeks to invest in companies or projects with the intention of generating measurable positive social and environmental benefits alongside financial returns.
As an investment that supports the development of community-scale clean energy projects that are expected to reduce carbon pollution, while generating competitive returns, CoPower Green Bonds are considered impact investments.
What is a green bond?
Like a government or corporate bond, a green bond is a fixed-return debt investment. When an investor purchases a bond, the issuing institution, whether a government or a company, pledges to pay the initial investment back plus interest over a fixed period of time.
Green bonds specifically raise funds for projects or initiatives that offer environmental benefits. A government green bond for example may be used to finance the expansion of public transit.
CoPower Green Bonds raise funds to support the development of small to mid-sized clean energy and energy efficiency projects primarily across Canada.
Investing with CoPower
Who is CoPower?
Founded in 2013, CoPower is a sustainable investment company and a leading provider of financing to clean energy and energy efficiency projects. The company was acquired by Vancity Community Investment Bank (VCIB) on November 8, 2019 and continues to operate as a wholly-owned subsidiary of VCIB.
Investment products purchased through CoPower are not guaranteed by the Canada Deposit Insurance Corporation or any other government insurer or by VCIB.
Who is Vancity Community Investment Bank
Vancity Community Investment Bank (VCIB) is Canada’s first values-driven bank. With a vision to finance a sustainable tomorrow, VCIB is the only Canadian bank exclusively focused on partnerships with organizations that drive social, economic and environmental change. The bank focuses on lending for social purpose real estate (affordable housing, co-op housing, co-working spaces, green and heritage buildings), as well as meeting the deposit needs of not-for-profit organizations, foundations and endowments.
Vancity Community Investment Bank (VCIB) is a wholly-owned subsidiary of BC-based Vancouver City Savings Credit Union (Vancity), Canada’s largest community credit union with more than 534,000 members and $27.4 billion in assets plus assets under administration.
How does CoPower work?
CoPower’s team of experts work with clean energy firms to identify clean energy or energy efficiency projects that generate steady revenues or savings by either selling clean power or by reducing energy consumption through efficiency services. We run a robust due diligence process before making loans that financially enable the projects.
CoPower pools these loans into green investment products, like our flagship Green Bonds, that make it easy for investors of all sizes to participate in these opportunities. Revenues from the projects are used to pay back CoPower investors over time, with interest. Please consult the latest Green Bond Offering Memorandum dated January 31, 2020 for details on our standard due diligence processes.
What are the benefits of investing through CoPower?
We provide access to investment opportunities that have traditionally been limited to institutional and high-net-worth investors or those with specialized expertise in clean technologies. CoPower makes it easy for individual investors, pending a positive suitability assessment, to invest in clean energy and energy efficiency infrastructure projects.
By investing with CoPower you can earn competitive returns, diversify your portfolio, and have a positive impact on the climate.
What types of investments does CoPower offer?
CoPower Green Bonds are fixed income products and are backed by a diversified portfolio of loans (debt investments) to clean energy projects, including renewable energy generation projects and energy efficiency infrastructure projects.
For accredited investors, including institutional investors, CoPower also offers bespoke direct investments in opportunities that fall outside of our CoPower Green Bond investment criteria. These may include higher yielding construction finance loans and/or project equity. For more information please contact firstname.lastname@example.org.
Who can invest?
CoPower offers investment opportunities for all types of investors -- from individuals to institutions -- pending positive suitability assessment.
How does CoPower make money?
We earn our revenues at the project level by charging an underwriting or arrangement fee to the borrower. We also charge a management fee to CoPower Finance Inc., the subsidiary of CoPower Inc. that issues CoPower Green Bonds. This management fee is based on the "spread" -- that is to say, the variable difference between revenues from interest payments on loans and the fixed bond obligations. These revenues help us cover the cost of sourcing projects and structuring our green investment products among other costs.
How do you track the impact of investments?
Each quarter we report on the environmental impact of your investment. The environmental impact is based on internal calculations performed by CoPower relying in part on standardized carbon accounting methodology. We also rely on data from the projects and determine your individual contribution based on percentage of overall project cost.
For example, to calculate solar impact we use clean energy projections as determined by PVSyst, the industry standard. We then check this against actual monthly solar production numbers for our projects as reported by the utility companies. To calculate energy efficiency we use projections of how much electricity and natural gas will be saved by the retrofit as determined by an independent engineering report. We check this against actual savings as measured by an independent engineer after one year.
To calculate greenhouse gas emissions avoided we use conversion factors provided by Environment Canada’s National Greenhouse Gas Inventory Report.
How do you process financial transactions securely?
The CoPower website does not perform any financial transactions. Authorization for transactions is obtained when you e-sign legal documents through Docusign. These authorization documents are used by CoPower and our bank (Royal Bank of Canada) to perform financial transactions off-line from our website. We only accept payments in the following forms:
In order for us to originate a pre-authorized debit, we are required to comply with the stringent security policies of both RBC and Payments Canada. For more information about the security of pre-authorized payments, please see Payment Canada's website here.
Investing in CoPower Green Bonds
Who can invest in CoPower Green Bonds?
CoPower Green Bonds are available to individual investors, pending a positive suitability assessment.
Is there a minimum investment?
The minimum investment amount in CoPower Green Bonds is $10,000. Thereafter, investors can purchase bonds in increments of $1,000.
Is there a maximum investment?
Depending on your financial situation, there may also be an upper limit to the amount you can invest in CoPower Green Bonds under Canadian securities law. You don’t need to worry about these limits as our investor relations team will take care of these details but we have set out some guidance below for your information.
What do the terms accredited, eligible and public investor mean?
How and when will I see my returns on my Green Bond investment?
You will start earning interest immediately on the date that your CoPower Green Bonds are issued. CoPower Green Bonds are issued on the first day of every month.
If you select a simple interest bond, you will receive quarterly interest payments deposited directly into your bank account, and principal will be repaid at maturity.
If you select a compounding interest bond, each quarterly interest distribution will be re-invested into green bonds, and you will then earn interest on all interest accrued, as well as on your principal investment. In this case, all principal and interest would be repaid at maturity.
Is an investment in CoPower Green Bonds secure?
The project loans underlying CoPower Green Bonds are secured by the project assets. We are also careful to invest in projects we believe to be of high quality: clean energy projects, primarily in Canada, that use well-established technologies and that sell or save energy to support loan repayments. Most, although not all, projects have agreements in place with a strong counterparty (e.g. a crown corporation, utility, portfolio of homeowners) to purchase the energy generated or the energy savings services. We also require certain security mechanisms, such as insurance, warranties, and debt-service reserve funds when appropriate, to further mitigate risk for our investors.
Important disclosures about our investment criteria, risks of an investment in CoPower Green Bonds, conflicts of interest and risk mitigation procedures are outlined in the Green Bond Offering Memorandum dated January 31, 2020. All investors should read the Offering Memorandum before investing in CoPower Green Bonds.
Are CoPower Green Bonds rated?
CoPower Green Bonds are not rated by an external agency at this time due to the cost of third-party ratings relative to the size of the offering ($20M).
How does CoPower make loans to the projects backing the Green Bond portfolio?
CoPower originates loans through trusted channel partners: energy firms with specialized development expertise that manage the installation process. Each project loan follows a standard due diligence exercise and checklist and is structured by our team of professionals, with oversight provided by the Chief Credit Officer and support from experienced legal counsel.
We maintain a standard due diligence checklist which is adapted to suit the needs of each individual loan. CoPower’s due diligence typically includes a review of both the sponsor and the project in question.
CoPower will review the sponsor’s corporate history, background, development expertise, management team, financial performance, liabilities, conflicts of interest and share capitalization. In terms of the project, CoPower will review and analyze financial projections and assumptions, the project development schedule, suppliers of technology and feedstock, operations, maintenance regulatory considerations, environmental problems or claims and insurance.
Details regarding our due diligence process can be found in the CoPower Green Bond Offering Memorandum dated January 31, 2020.
Can I invest in a specific clean energy project of my choosing?
No, and for good reason. In order to mitigate risk for investors, we pool together the loans we’ve made to clean energy projects into a diversified portfolio that backs our Green Bonds. By combining hundreds of projects across different geographies, technologies and counterparties, we prevent bondholders from being overly exposed to any one area. This is an important feature of our bonds and is in part what makes them suitable for individuals.
Is refinancing impactful?
Many of the project loans backing our Green Bonds are refinancing for operational clean energy projects. According to the Climate Bonds Initiative, the primary value provided by the bond market is refinancing, in that refinancing allows capital to be recycled to new projects. The easier it is for investors and lenders to recycle their equity, the more they will invest in new projects. A large and liquid green bond market is a necessary precondition for building low carbon infrastructure at scale.
In seeking to add the greatest value and meet the needs of clean energy developers CoPower provides other types of financing as well.
Are there any fees associated with investing in CoPower Green Bonds?
CoPower bears all issuing, management and administrative expenses of CoPower Green Bonds, so the projected annual return that we disclose is your expected net return.
If you invest in CoPower Green Bonds directly via our platform there are no investor fees, period.
Note that some financial institutions may charge additional fees for holding private placements in registered accounts. Please inquire with your registered account custodian whether additional account administration, transfer, placement or redemption fees apply.
If payment is made by wire transfer or cheque instead of pre-authorized debit, a $25 processing fee may apply.
Can I invest through an RRSP or TFSA?
CoPower Green Bonds are eligible to be held in most types of registered accounts (eg. RRSP, TFSA).
All CoPower clients can open a registered account at Olympia Trust or Questrade and invest in CoPower Green Bonds. Certain restrictions and administrative fees apply, and your financial institution may charge you fees for holding private placements on your behalf.
Can I invest via my own financial institution, advisor or brokerage?
While the majority of investors choose to invest directly through CoPower, there are growing number of financial institutions, wealth managers and online investment brokerages that have successfully facilitated CoPower Green Bond investments for their clients. If you have an advisor, get in touch with us and we’ll help you explore your options: email@example.com.
Questrade: All CoPower investors can open an account at Questrade to purchase or hold CoPower Green Bonds in a TFSA or RRSP, providing that the redemption date of the bonds is prior to the client turning 71, or before the account rolls over to a RIF or LIF account. We've provided additional information about this option here. Please note, Questrade will no longer allow RESP, RDSP, RIFS, LIFS or LIRA accounts to hold CoPower Green Bonds.
Olympia Trust: All CoPower investors can open an account at Olympia Trust to purchase or hold CoPower Green Bonds in registered accounts.
It’s important to note that financial institutions each have different policies and possibly fees associated with holding private placements on your behalf. Ask your current account administrator about their private placement policies, or email firstname.lastname@example.org for more information.
I’m an investment advisor. Can I buy CoPower Green Bonds or other investments on a client’s behalf?
Yes. CoPower Green Bonds can be purchased on a client’s behalf as a private placement. Please email email@example.com for more information.
Can I sell my Green Bonds?
No, CoPower Green Bonds are private investments and are not traded on any public exchange and cannot be easily sold or traded on a secondary market. Investors should be prepared to hold their bonds to maturity.