Half of the investors financing the Balearic Islands' large solar farms are residents

PalmaNearly 50% of investors in photovoltaic megaprojects in the Balearic Islands are islanders. These projects, which often generate debate due to their impact on the land, are usually financed by contributions from individuals and investment funds. In the Balearic Islands, local participation is particularly high, and more and more residents are investing part of their savings in them, seeking economic returns. For these investors, it represents a new business opportunity that has emerged, while a significant portion of society, including environmental groups, agricultural organizations, and even the Administration, have expressed concern about the territorial destruction they promote.

The financing process for individual investors in the Balearic Islands for the Cap Blanc (Llucmajor) photovoltaic megaproject is currently open. In this case, the project, coordinated by the investment platform Fundeen, offers a participation structured as a loan with a fixed interest rate of 7% per year for five years, with an estimated accumulated return of 36.67%. These conditions have sparked the interest of numerous residents, who see renewable energies as an investment opportunity and a new business niche that, once again, turns rural land into a ground for speculation. At the same time, the projects continue to generate controversy among groups that question the occupation of rural land for energy production and the impact these megaprojects have on an Archipelago already heavily impacted by construction.

In this regard, Margalida Rosselló, spokesperson for the platform 'Renovables sí, però així no' (Renewables yes, but not like this), points out that solar megaprojects are a "win-win business" for investment funds. "They don't have to pay workers, they receive aid from institutions, and they invoice thousands and thousands of euros; the problem is that they do all this at the expense of the land," she remarks. For Rosselló, the problem is that there is no energy or territorial planning whatsoever on the part of the administrations, and ultimately, "it is the companies that plan and do what they want, destroying the biodiversity and rural land of the Balearic Islands."

On the other hand, Fundeen's co-founder and Chief Operations Officer, Adrián Bautista, points out that the Balearic Islands are one of the regions in Spain with the highest participation of residents in this type of project. In his opinion, the economic participation of neighbors in project financing can help change the perception of these facilities."If a neighbor sees the large park and it bothers them, but then they think that the sun hitting the panels is generating money for them, they feel the grievance is less," says Bautista. However, the debate about the balance between the energy transition, landscape preservation, and economic benefits remains open on the Islands.

It should be noted that it was the Balearic Islands Climate Change Law that opened this path of economic exploitation for the islanders, as it determines that in certain renewable installations of a certain power (greater than 5 MW), a part of the investment must be reserved so that local investors can participate before opening it to the general market. In other words, if there are investors who are to profit from the exploitation of rural land, the law protects that a percentage of these will be residents of the Balearic Islands. Regarding this regulation, Rosselló criticizes that "only the rules that interest them are heeded and followed, but then no measures are taken to reduce consumption".

In the case of the Cap Blanc macro-park, before this investment period opens for islanders, almost 200 residents of the Archipelago have already reserved their place in this project. Specifically, the co-founder and Operations Director of Fundeen has explained that shares of this fixed-interest loan have already been reserved for over 1.7 million.

While it is true that Fundeen points out that many investors believe in the project and see it as an opportunity to add their grain of sand towards sustainability and energy autonomy, they also acknowledge that many others do so purely for economic reasons. Fundeen assures that their intention is to seek the best possible deal for investors, as those who really make the project happen are not them but an investment fund. In fact, normally in Spain the minimum amount for this type of project is 100,000 euros, and Fundeen has lowered this quota to 500 euros to reach more people. That is why they emphasize that "it is a safe investment" and that they have a guarantee in case something goes wrong. However, they assure that "it is practically impossible".

In this regard, they have explained that it works exactly as if the person investing were a bank making a loan to a user. In this case, they make a loan and, therefore, finance a solar project. At the time of investment, the person is detailed and informed of the financing conditions. In the case of Cap Blanc, once the owner company of the macro-park (Mirova Energy Transition 6) sells the energy generated by the panels, the person will receive the agreed-upon interest.

The big question is what happens if the park doesn't work or there's a problem? As Bautista explains, the investor is perfectly informed and covered. In this case, Mirova has provided a guarantee of 1.2 billion to cover possible losses and pay investors. Therefore, as they explain, it is "like putting money in a bank for a fixed term, but knowing that you are investing in renewable energy and sustainability".

However, the reality is that the financing system for some solar farms has helped increase the speed at which development companies acquire resources. Furthermore, they are at least partially spared from having to go to banks to obtain the money that makes investment possible. In other words, it is the islanders who, in part, make possible the farms that a large part of society criticizes. It is a new model of economically exploiting the land without even being directly involved. Financing projects for macro-farms on rural land in exchange for economic compensation. In fact, the spokesperson for the platform "Renewables yes, but not like this" assures that people who invest in this type of project "do not do so to improve their self-consumption, but to do business".