For many years Duncan Grant of Faichemard Farm at Invergarry had watched the rise and fall of the burn running through his farm and wondered at the possibility of establishing a 150 kilowatt micro-hydro scheme to harness this renewable energy and produce electricity. Using new tenant rights gained as a result of the “Tenants Right to Diversify” Duncan was able to apply for and obtain financial support through the Agricultural Business Development Scheme. Grid connection and power purchase agreements were also on offer from the power industry. Combining personal funds together with the ABDS grant meant that well over a third of the cash required to install the scheme was already available.  However, securing all the required balance of funding as a commercial loan proved to be surprisingly difficult.

 

Highland Opportunity Limited, the Highlands Council’s business development company, broke the deadlock by offering to invest £50,000 in the scheme alongside Duncan in return for a share of the power sales for a fixed number of years. With this innovative “Production Sharing Agreement” in place, Duncan has now been able to secure the rest of his finance from his bank as a business loan.

 

Plugging the funding gap for a micro-hydro scheme in this way could be used as a model for other micro renewable energy schemes across the Highlands. Commenting, David Owen, Manager of Highland Opportunity said “this seemed an ideal use of our funds where Highland Opportunity would appear to be the investor of last resort for a Highland business. Our investment has helped to lever in a commercial bank loan while at the same time giving us a very good return on our money.”

 

On an individual level the investment will ensure that the financial security of Faichemard Farm is passed on from Duncan, the 4th generation of Grants on the land, to his son, who would like to move with his family back onto the farm. The project itself complements existing non agricultural business activities on the farm that includes self catering chalets and a campsite. From a wider perspective, the investment supports the Highland Renewable Energy Strategy and provides a possible model for working relationships with other landowners, farmers or communities trying to make investments in renewable energy schemes.