Crowdfunding for energy projects


Crowdlending is a practice where a number of lenders grant loans via an internet platform. In return, the lender is promised that the provided amount of money will be paid back (usually increased by interest). With crowdinvesting, however, what the lender receives in return for the provided capital is an interest in the future result of the holding company that borrows the money.


According to the Crowdinvesting Marktreport 2015 published on, a crowdfunding information website, crowdinvesting alone generated an investment volume totalling EUR 48.9 million in 2015 in Germany (compared to EUR 18.2 million in 2014). EUR 6.9 million thereof was attributable to the so-called “green energy projects”. In 2014, this share was only EUR 2.6 million. Ranked behind real estate investments and investments in start-ups and small and medium-sized enterprises (SME), green energy had the third largest market share (14.1 percent) in 2015 measured by the financing volume. With a total of 46 successfully financed projects it even topped the list. According to the Crowdinvesting Marktreport 2015, the largest market shares in the “green energy” investment category are attributable to investments in energy efficiency (30.4 percent), followed by solar energy investments (21.8 percent) and wind power (16.8 percent).


Both with crowdlending and with crowdinvesting, borrowers and internet platform operators can be subject to obligations arising from provisions of regulatory law. This can include the obligation to obtain an authorisation under the German Banking Act (KWG), the German Payment Services Supervision Law (ZAG), and the German Capital Investment Act (KAGB), prospectus-related obligations under the German Investment Act (VermAnlG) and the German Securities Prospectus Law (WoPG) and other obligations, e.g. under the German Securities Trading Act (WpHG). In this context, the crowdfunding structure is always key. 


One of the possible crowdlending structuring options is, in particular, the so-called “subordinated loan”. With a subordinated loan, lender and borrower agree within the framework of the loan agreement that the lender's claims will be satisfied only after the senior claims of other creditors of the borrower are satisfied. In particular, they agree that interest will be paid and the granted capital repaid only if this does not result in the opening of insolvency proceedings (so-called qualified subordination). If such qualified subordination is effectively agreed, the loan does not qualify as so-called deposit-taking according to the KWG, which would require the relevant authorisation under the KWG. The acceptance of such loan rather constitutes an asset investment under the VermAnlG that might be privileged, as the case may be.


The provisions of the VermAnlG apply to crowdinvesting in a situation where the borrowing holding company is a so-called operationally active enterprise from outside the financial sector, and thus not an investment fund, and where the KAGB is not applicable for this reason. The Federal Financial Supervisory Authority (BaFin) classifies as operationally active enterprises in particular enterprises that “develop or build real estate, manufacture, buy, sell or exchange goods and merchandise, or offer other non-financial services”. If appropriately structured, also holding companies that operate a wind, solar or other power plant themselves or through a third party that is involved in and controlled by the holding company may fall under this definition. The VermAnlG includes several exceptional or exemptive regulations. In connection with crowdfunding, especially the exceptional regulations included in § 2 no. 3 VermAnlG and the exemption under § 2a VermAnlG, which has been applied to crowdfunding since the German Act on the Protection of Small Investors came into effect, could be of relevance (see our article dealing with the entry into force of the German Act on the Protection of Small Investors in the October 2015 issue of E|nEws). In this context, it should be noted that, according to the underlying statement of grounds of the Act, the exceptional regulations included in § 2 no 3 VermAnlG apply to both crowdlending and crowdinvesting, whereas the exemption included in § 2a VermAnlG normally cannot be applied to crowdinvesting. 


§ 2 no 3 VermAnlG includes three independent exceptional rules and declares a large part of the provisions of the VermAnlG inapplicable, if a crowdfunding deal refers to maximally 20 shares in the same asset investment, if the sales price for the shares in an asset investment offered in a period of 12 months does not exceed a total of EUR 100.000 or if the price for each offered share in an asset investment amounts to at least EUR 200,000 per investor. § 2a VermAnlG, however, limits the scope of application of the VermAnlG to crowdlending if subordinated loans are brokered exclusively as part of an investment consulting or investment brokerage service via an internet website and the thresholds established in the VermAnlG in respect of the total volume of asset investments that an investor may acquire from one issuer are not exceeded.


If one of the above-mentioned exceptional or exemptive regulations is applicable, the obligation to publish a prospectus and – if one of the exceptional regulations as per § 2 no 3 VermAnlG applies – to develop an investment asset information document may not be applicable.


Crowdfunding has been and still is a relatively small but quickly developing area. As the past years have shown, crowdfunding has been becoming more and more attractive to renewable energy projects. The obligations arising for borrowers in this context, in particular those arising from regulatory law, essentially depend on how crowdfunding is structured. We will be happy to assist you!


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