Largest community-owned hydro scheme in Scotland achieves financial close

23 June 2020

A community-owned small hydropower scheme in Lochaber, Scotland has secured £6.49 million of funding from Triodos Bank and the Energy Investment Fund, meaning the project has reached financial close.

The finance will be used by the Morvern Community Development Company (MCDC) to support the development of a 1.6MW capacity  high-head (142m) hydropower scheme on the Barr River near Loch Teacuis, Morvern.

The community has been exploring the potential for a shared-ownership hydropower scheme since 2013. The funds will go towards the construction and operation of the hydropower scheme by MorVolts Ltd, a wholly owned subsidiary of the MCDC, a registered charity that aims to benefit the community of Morvern. 

“We are delighted to have reached financial close and can now begin building the scheme. Getting to this point has taken a huge investment of local volunteer effort sustained over many years,” said Jane Stuart-Smith, Chair of the Morvern Community Development Company. “Morvern is a delightful place to live and work but it faces challenges to maintain a sustainable community in a remote rural community location. MCDC has a strong track record in creating and delivering local infrastructure projects. The income from the scheme will be an important source of investment into the local development priorities. There is an increasing focus on community involvement in energy networks. The scheme also gives the Morvern community a strategic stake in the energy supply on the peninsular.”

The £6.49 million of funding is made up of a £4.26 million Triodos Bank loan and £2.23m from the Energy Investment Fund, which is administered by the Scottish Investment Bank on behalf of the Scottish Government.

“I am pleased that Morvern Community Development Company’s MorVolts Barr Hydro scheme has reached financial close. Morvern are a fantastic example of what an empowered community can achieve, with a great track record in project delivery and actively engaged in planning for their future,” Paul Wheelhouse, Minister for Energy, Connectivity and the Islands, said. “The Scottish Government through our Community and Renewable Energy Scheme (CARES) delivered by Local Energy Scotland, has been assisting Morvern since 2014, providing both advice and funding support and I am pleased our Scottish Investment Bank has been able to contribute £2.23 million through the Energy Investment Fund to make it happen.

“At 1.6MW, the scheme is, I understand, the largest hydro in the UK to be entirely community-owned and that is a tremendous achievement for Morvern. I am also really delighted that all profits from the project will be channelled back into the community to support local priorities and, I am sure, this will make a real and positive difference to the lives of local people and this is why we are keen to see more projects such as this.”

Many different groups have come together to make this project work, including the Scottish Government, Scottish Investment Bank and Forestry Land Scotland.

Kerry Sharp, Director, Scottish Investment Bank, said: “Scotland has been harnessing the power of water through hydro-electric schemes for more than one hundred years, particularly in the Highlands where hydro has been crucial in connecting remote rural communities to the grid.

“As well as being a big part of Scotland’s energy past, the support for the Barr River project proves that hydropower can be a major part of Scotland’s energy future. We’re genuinely excited to help MCDC continue to capitalise on Morvern’s natural and built environment for the benefit of the local community.”

The project will take approximately 14 months to build and is expected to operate for at least 50 years.


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