The next phase for CoPowerDear friends and supporters,
Today, we’re writing to update you on the next phase for CoPower.
Together with our parent company Vancity Community Investment Bank (VCIB), we have made the decision to fully integrate our strategy and operations, including our clean energy lending and fundraising activities, in order to focus our resources toward financing a sustainable tomorrow as a commercial bank. This means that we will be winding down our green bond funding model and retail investment platform over the next few months.
The good news is that CoPower’s mission lives on with VCIB. CoPower was founded with the goal of accelerating the transition by financing clean projects underserved by traditional financial institutions like banks and credit unions. Our team is now able to continue this work at a larger scale as a bank.
Through VCIB we are financing a broader range of high-impact projects at a lower cost of capital than was possible through CoPower, and our valued community of investors is what got us here.
With the support of this community, we were able to prove the viability of investing in underserved clean energy projects, and through our acquisition, clean energy project financing has become a core priority for VCIB. The CoPower brand, relationships, and team expertise have also enabled an increased focus on clean energy and sustainability within the bank’s business and real estate lending groups, so that together we have an expanded tool kit of green financing solutions. And, as part of the larger Vancity Group, we’re supporting the most ambitious climate commitments made by any financial institution in Canada, and modelling what’s possible for the broader banking sector.
We know that the accessibility of CoPower Green Bonds was one of their most exciting features, and we understand that there may be disappointment both that the product is no longer available to individual investors. We hope to carry forward our learnings from the CoPower experience to support the development of new impact investment opportunities within the Vancity Group and, more broadly, within the Canadian social and sustainable finance ecosystems, where we continue to see more and more opportunities for Canadians to invest in line with their values.
We can’t thank our supporters enough for believing in our mission and coming on this journey with us. We hope you will continue to follow and engage with us as we carry on our important work as VCIB.
Trish Nixon on behalf of the CoPower Team
Your questions answered
What will happen to outstanding bonds and loans in the green bond portfolio?
CoPower will redeem all outstanding Green Bonds at the end of this quarter, and VCIB will acquire and continue to manage the loan portfolio with the clean energy team. The projects will continue to receive support from our clean energy team.
If clean energy projects are still being financed through VCIB, why isn’t it possible to continue the CoPower Green Bond model?
The CoPower Green Bond model relies on the ‘spread’ between the interest rate charged on the clean energy project loans and the rate paid to green bond investors to cover operating costs associated with fundraising, lending, and managing the portfolio, technology, and investors. In a continuing low-rate environment, it is increasingly challenging to lend to great projects and issue private bonds at competitive rates while making those economics work. By fully integrating with VCIB, we can streamline operations while continuing to lend to projects at a lower cost of capital than we could through CoPower – which is ultimately a great thing, as a competitive clean energy finance market where projects can benefit from low interest rates will accelerate the transition to net-zero.
The Vancity Group will retain the learning from CoPower Green Bonds, and will continue to explore opportunities to offer impact investment opportunities through its wealth management arm.
Where can I find other responsible and impact investment opportunities?
There are some great options available through the Vancity Group, which has been a leader in the space for many years. If you are investing on behalf of an organization or through a corporate entity, you can consider investing VCIB Impact GICs, which directly support the bank’s lending to impactful businesses, social purpose real estate, and clean energy projects. We can also connect you to our sister organization Vancity Investment Management. If you are an individual investor in Ontario, Alberta or BC, we would be happy to connect you to a wealth planner, wealth advisor or portfolio manager at Vancity.
For a list of other currently available impact investment products, check out openimpact.ca. The RIA marketplace is another good resource for a broad range of responsible investment products, as well as investment professionals who specialize in helping investors align their portfolios with their values.