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Think-tank scheme for local investment

September 2012

 A social enterprise finance model of community infrastructure bonds  (Cibs), using multiple revenue streams and links to land and property values through a Special Purpose Vehicle (SPV), has been proposed as a means of financing UK infrastructure projects outside of conventional tax and spend models. 
 
The Cibs are intended to attract investment from local citizens and businesses, among others, into a large-scale regeneration social enterprise. Cibs could help develop the transport, energy, technology and civic infrastructure at a local and regional level, fuelling the economy from the bottom up.
 
Infrastructure development is currently financed through various forms of negotiated agreements between the public and private sectors. Citizens, civil society and local businesses are excluded from this equation.
 
Think-tank ResPublica is behind the proposed Cibs and, by taking inspiration from social enterprise, proposes a model that could deliver popular, longer-term infrastructure financing, offering a method of engaging communities, citizens and local businesses, as well as other investors, more directly in the financing, control and governance of the physical assets around them.
 
The SPV, which would have a social mission and work in the interests of a defined community, crossing rigid public-sector boundaries and beyond the influence of short-term politics would manage the Cibs. They could have an asset lock, a dividend cap and surpluses reinvested locally.
 
ResPublica points out that recent evidence of the success of social enterprises and co-operatives – outperforming their more red-blooded counterparts over the past few years – and the commercial successes of community-owned shops, for example, demonstrates how aligning incentives between investors, enterprises, customers and community can create more socially and financially successful business models.
 
ResPublica says this model shows how infrastructure could be financed and owned in a more meaningful sense, potentially offering a more transparent, inclusive and democratic investment platform that could unlock billions of pounds of latent investment.



ResPublica | UK & NI Ireland | Investment

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