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Email this10:15 am
October 15, 2015
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https://copower.me/en/products/bond/green_bond_series_E
They pay 5% for 5 years. What do people think about them? I saw the ad here.
11:00 am
May 28, 2013
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These bonds are perhaps better discussed in a forum dedicated to investments such as stocks and bonds, such as
https://www.canadianmoneyforum.com/
I would be very careful investing in such bonds. They are not backed by anything such as CDIC; you can lose it all.
I would prefer to keep this web site discussion to high interest savings accounts, and GICs.
11:10 am
October 15, 2015
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Fyi I posted it in general financial discussion which i assumed is non gic discussion and as there is a 30+ posts on israel bonds i assume there is interest in bonds. Its interesting to get the perspective of fixed income investors, canadian money forum are predominently stock investors.
1:02 pm
October 21, 2013
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I think it's OK to discuss it here as it's an alternative for fixed income people.
I know people who have invested in this, but I have not.
I think you should consider the following:
It's suitable if
1. you are very concerned about environmental issues and a supporter of the values that this enterprise is trying to foster, i.e. alternative energy. In other words, you are motivated by ethical considerations not greed. Greed leads to bad decision-making.
2. You are in a position where you could afford a loss if it came to that.
3. Your investment is a small percentage of your total investable assets. (probably max 5%)
If you meet these criteria, it's a reasonable choice. If not., look elsewhere.
I don't know much about how this organization operates, but it appears that it operates in Ontario as well as other provinces. The new PC gov't in Ontario is not a supporter of alternative energy, so you should consider whether this organization could be vulnerable to any changes in gov't policy.
2:20 pm
October 27, 2013
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Caution. The bonds are a private investment, do not trade in public markets and have no credit rating. Imagine what could happen if political interference, e.g. Ford, turns green power upside down bankrupting firms.
4:53 pm
October 21, 2013
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AltaRed said
Caution. The bonds are a private investment, do not trade in public markets and have no credit rating. Imagine what could happen if political interference, e.g. Ford, turns green power upside down bankrupting firms.
Agreed. The chill that emanates from Ford is obviously already affecting this investment, or else this particular caution would not have been issued.
5:27 pm
October 15, 2015
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Thanks
I didn't think of political interference. I'll give this a pass for now.
9:11 pm
April 6, 2013
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It is a good idea to pass.
The company is CoPower Finance, Inc. It is not a regulated trust company, regulated credit union, or a regulated bank. No deposit insurance.
I downloaded the Offering Memorandum, dated May 11, 2018, for the bonds from Issuer Profiles on SEDAR. Company is offering up to $20 million of the Green Bonds.
As of December 31, 2017, the company had only $34,164 of net shareholders equity! 
That's net of the $7.3 million that the company owes its bondholders and lenders.
For assets, the company has $2.1 million cash and $5.1 million of loans made.
That $34,164 of shareholder money is not much of a buffer against losses on the $5.1 million of loans. Just losses of 0.7% on the loans would wipe out shareholders equity and start causing losses to the bondholders and lenders.
Debt to equity ratio is $7.3 million / $34,164 = 213.68 to 1!
I think 5% per annum is not enough for taking that kind of risk.
I didn't find any ratings from bond rating agencies like DBRS. Based on the above, I see these bonds as junk bonds.
4:19 am
October 21, 2013
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I don't read the situation as being as dire as Norman suggests.
Their structure is such that they loan out the money that is loaned to them to various green energy projects. It's the success of the projects that in large part determines the success of CoPower. With that in mind, political risk is higher now than it was a few months ago, at least in Ontario, and it looks to me like that may be the biggest risk factor. There is also an election coming in Quebec. That said, I have no information on how dependent the organizations that CoPower funds may be on government support. In the long run, green energy is here to stay or else we aren't.
CoPower says "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 produce a steady revenue stream. We lend to projects where there is a strong counterparty (ie. end payer), and we require certain security mechanisms, such as insurance, warranties, and debt-service reserve funds, to further mitigate risk for our investors."
As of 2017, they'd raised over $18 million and funded over 400 projects. It appears that they were founded in 2013 (unconfirmed).
What I couldn't find though is any details on their track record. I'm pretty sure they've been paying their bondholders, and I would guess that most people renew at maturity if they've been receiving their interest regularly.
It's an investment for people who want to get involved in supporting green energy, and who can afford the risk. This is a niche item and will suit a small minority of people at this time, for various reasons, not the least of which is the amount of research you might have to do in order to be satisfied that you wanted to make this investment. For me, the latter would be a big deterrent. I am put off by the fact that it's not easy to see which projects they are currently invested in or a an analysis of the previous ones' outcomes. If it's there, I couldn't find it.
8:50 am
September 11, 2013
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I agree with those who point out there's financial risk here, but many of those who buy such vehicles will do so for virtue-signalling (i.e. I'm not a greedy person, I am one of those superior spirits motivated by a concern for humanity) so these instruments will serve admirably for that purpose. And if you lose your money you will have "donated" it to the green power industry, so there's more cachet. Either way, I wouldn't worry about humanity's future.
As far as "greed leads to bad decision making", not in any way my personal experience. My greed has led me to my most profitable investments.
1:30 pm
April 6, 2013
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Loonie said
I don't read the situation as being as dire as Norman suggests.
…As of 2017, they'd raised over $18 million and funded over 400 projects. It appears that they were founded in 2013 (unconfirmed).
What I couldn't find though is any details on their track record. …
The situation is actually as I described.
They are pulling the same stunt that Desjardins has done with Zag Bank. Desjardins tries to muddy the difference between Zag Bank and itself, leading people to think their Zag Bank deposits are somehow Desjardins-backed deposits instead of deposits in a small bank in Alberta (formerly Bank West) that they bought.
CoPower Inc may have raised all that money. But, the bonds offered are not bonds of CoPower Inc. The bonds are of another company CoPower Finance, Inc. that has the net worth of only $34,164.
Note #1 of the audited December 31, 2017 financial statements in offering memorandum states that CoPower Finance came to being in November 2016:
CoPower Finance Inc. (the “Company”) was incorporated under the Quebec Business Corporation Act on November 21, 2016. The Company's primary objective is to achieve superior returns for its shareholders by investing in projects via loans that it determines is financially lucrative. …
I don't think the loans made by CoPower Finance (in constrast to CoPower Inc) are that low risk, judging from the 8.5% to 9.25% interest charged on the loans listed in Note #5. Also, what kind of a loan is "repayable in monthly blended installments of principle and interest that varies from month to month based on a repayment schedule agreed on with the borrower"!
3:52 pm
April 6, 2013
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Bill said
… And if you lose your money you will have "donated" it to the green power industry, so there's more cachet. Either way, I wouldn't worry about humanity's future.
Lots of these green initiatives end up being "donations". Even the simple one of light bulb replacement has iffy return on investment.
Those compact fluorescent light bulbs I installed were supposed to last almost 10 years. I don't think it has ten years yet since initial install. I've replace burned out CFL bulbs at least twice now. 
One CFL bulb lasted a whole 5 minutes! -99.99% ROI on that bulb.
4:27 pm
December 17, 2016
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From the New York Times, October 2017 -
Germany has spent an estimated 189 billion euros, or about $222 billion, since 2000 on renewable energy subsidies. But emissions have been stuck at roughly 2009 levels, and rose last year, as coal-fired plants fill a void left by Germany’s decision to abandon nuclear power. That has raised questions — and anger — over a program meant to make the country’s power sector greener.
1:49 pm
November 20, 2018
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Dear forum,
I realize this discussion happened months ago, but I just stumbled over it while checking CoPower’s SEO this week. I was very interested to read the comments and wanted to clarify a few things about our Green Bonds (I work for CoPower).
- Regarding the new Ontario government’s attitudes toward renewable energy highlighted by AltaRed. We’ve written a detailed blog here explaining how CoPower is and isn’t affected (https://bit.ly/2OgHh1e).
The key point is that we have only financed FIT projects post-COD that have strong, enforceable power purchase agreements with the IESO. From the blog: Termination would be extremely costly for the IESO, as project owners (and by extension, lenders) would be entitled to compensation for current and future loss of revenue. Any unilateral or arbitrary action by the government could be expected to impact Ontario's credit rating and reputation as a great place to do business.
Unfortunately, the government’s cancellation of 758 contracts and accelerated wind-down of the FIT program has wiped out a portion of our future project pipeline, but given that we work in several provinces and finance a variety of clean energy technologies this has not had a significant impact.
- Regarding the difference between CoPower Inc and CoPower Finance Inc. Norman1’s analysis is factually correct, but not really relevant to CoPower’s model which Loonie describes.
Essentially, CoPower Finance Inc. is a debt-funded entity that solely issues bonds and places loans to revenue-generating projects. Norman1 is correct that there is only a small amount of equity in Finance Inc; however, we require borrowers to set up debt service reserve accounts to reduce the impact of a project default. Our other risk mitigating measures include, typically, lending up to 80% debt to the project leaving a 20% equity stake for the project owners to make sure they have skin in the game. We ensure adequate warranties and insurance are in place. We ensure our portfolio is diversified across technologies and geographies. You might be interested in our blog on how we select projects and perform due diligence (https://bit.ly/2OloTDO).
- Regarding our green bond track record, all interest payments have been paid on time and in full, and to-date we have had no defaults on the project portfolios backing the bonds.
- To clarify for christinad the terms on our current issuance are 5% annually over 6 years.
- To confirm for Loonie, we were founded in 2013 and we issued our first Green Bond in 2015.
- To-date we have raised close to $25 M ($15M in Green Bonds) which have supported over 1100 projects (as of Oct 2018).
- Thanks for the feedback on wanting greater transparency about the projects and their track record. Since this discussion, we have published a document with more project details which can be downloaded here (https://copower.me/en/green_bonds). We also are currently re-designing the way projects are displayed on our website and will take this into account.
- If anyone is interested in learning more, we hold live bi-weekly webinars (https://bit.ly/2Ku2CSs). Our capital team would be happy to go into further detail on questions raised by this forum then or by email: investors@copower.me.
Cheers,
Greg
9:00 am
September 30, 2017
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As of October 4, 2021, redemption payments have been made on all outstanding CoPower Green Bonds. I suppose their loans are transitioned to Vancity
The 2021 T5 should be the final I hear from this little venture. But in hind sight, who in 2018 could have foresee 2019, 2020, 2021.
Please write your comments in the forum.