The first council solar bond to be issued in the UK has sold out a month ahead of its final deadline in a landmark project that could kick-start a new wave of community energy projects.

The bond offer for Swindon Community Solar Farm was launched in February seeking to raise £1.8 million for the construction of the 5MW development on council-owned land at Common Farm, Wroughton.

It closed on Tuesday following a 3-month period which saw huge interest from local residents. According to investment platform Abundance, which structured the bond offer, the project attracted an average of £18,000 in investment per day with a third coming from the Swindon area.

The public funding will join £3 million being invested by Swindon Borough Council, which will use the project as part of its efforts to install 200MW of renewable capacity by 2020.

Councillor Dale Heenan, Swindon Borough Council cabinet member for transport and sustainability, said: “We took a bold decision to create this community solar farm by offering the first council bond direct to the general public in over 100 years. It was a calculated risk to raise £1.8 million this way, but we knew there was an appetite from residents to invest in something with genuine environmental and community benefits.

“The fact that we’ve hit the target four weeks early proves how successful this project has been.”

A Community Interest Company, wholly owned by Swindon Borough Council, will manage the site, with is expected to be complete by the end of this month. Revenues will be raised from the project’s pre-accredited status to the feed-in tariff prior to government cuts implemented earlier this year.

Members of the public who invested in the scheme will receive an effective rate of return of 6% over its 20-year term. In addition, 65% of the distributable profits from the solar farm will go towards funding local community initiatives, with the remaining 35% going to the council.

Heenan added: “All councils need to find new and innovative ways to fund the vital work that they do for their communities, and Swindon now has a template which other local authorities can follow. Embracing renewables will help Swindon Borough Council raise £1 million more in business rates and rent by 2020, which means £1 million more every year which can be spent on important local services.”

According to Abundance, the landmark project has opened up new possibilities for funding community energy projects, with other council already eyeing their own developments.

Bruce Davis, managing director of the firm, said: “The success of this investment offer has really set a standard for local authorities looking to fund green infrastructure. We’ve had lots of inquiries from other councils interested in following Swindon’s pioneering lead.

“Energy is one area where local authorities have the power to make a difference, engaging and enabling their residents to take positive action and invest in a more sustainable future. We’d also like to see them going beyond solar and fund other infrastructure projects this way.”