The pioneering scheme which aims to raise £1m to tackle the climate emergency in Islington is offering a fixed tax-free return of 1.55 per cent annually to investors.

So far over £300,000 has been channelled into the council's Islington Greener Futures: Community Municipal Investment (CMI), since it launched this week to "help create a greener future".

CMIs allow local authorities to issue a bond through a crowdfunding platform, and Islington plans to use the money raised to support low-carbon projects.

The council has teamed up with the crowdfunding platform Abundance Investment to launch the scheme which is the first of its kind in London, and investors can choose which project to support.

The lowest possible amount to invest in the Innovative Finance ISA stands at £5, with a maximum of £20,000.

Interest is paid twice a year and the original capital is returned after five years.

Projects on the table include the installation of electric vehicle charging points, improving recycling facilities, working towards zero carbon recycling and waste collection, and installing LED lighting and solar panels on public buildings to reduce carbon and the cost of electricity.

Karl Harder, co-founder and joint managing director of Abundance Investment, said: “Having grown up in the borough, it is great to see Islington Council demonstrating real leadership in London by providing their residents with the chance to make a real difference to local efforts to combat the climate emergency."

An Ifisa, or peer-to-peer loan, usually offers a higher rate of interest than a traditional savings account, but in the past investors were not protected by the Financial Services Compensation Scheme, and some lost their savings.

Abundance is the world’s first Financial Conduct Authority regulated investment-based crowdfunding company, but nevertheless, it warns on its website: "If the company or local authority you have lent money to runs into difficulties, it may not be able to pay your returns and you may not get back all or any of your original investment."

More information and details on how to invest in the Islington Greener Futures ISA can be found at abundanceinvestment.com.