Financing renewables: digital bonds and citizen participation

Short answer

Developers of solar, wind and battery storage projects can raise capital through a digital bond: a bearer bond entered in a crypto securities register as a crypto security under the Electronic Securities Act (eWpG). Since 5 June 2026, public offers of securities below EUR 12 million per issuer or offeror over twelve months have been exempt from the prospectus requirement, provided there is no notification under Article 25 Prospectus Regulation (Article 3(2) Prospectus Regulation); in Germany, such offers of EUR 100,000 or more over twelve months generally require a securities information sheet (WIB) under § 4 of the Securities Prospectus Act (WpPG). Unlike a subordinated loan, the bond is a transferable security and not an investment product under the Investment Products Act (VermAnlG).

At a glance

Prospectus-free: public offers below EUR 12 million per issuer or offeror over twelve months, provided there is no notification under Article 25 Prospectus Regulation (Article 3(2) Prospectus Regulation, applicable since 5 June 2026).
Securities information sheet for electronic securities: up to four A4 pages, published only after BaFin permits it (§ 4(2) and (3a) WpPG).
Subordinated loans are investment products (§ 1(2) no. 4 VermAnlG); unless an exemption under §§ 2 to 2c VermAnlG applies, such as the crowdfunding exemption in § 2a, a minimum term of 24 months and six months' notice apply (§ 5a VermAnlG).
Municipal participation under the Renewable Energy Sources Act (§ 6 EEG): a unilateral payment to municipalities or districts of up to 0.2 cents per kilowatt hour, not an investment.

Why a security instead of a subordinated loan?

Many citizen investments in energy projects have so far been offered as subordinated loans. Under § 1(2) no. 4 VermAnlG, a subordinated loan is an investment product (Vermögensanlage). Anyone offering it publicly in Germany generally needs a sales prospectus (§ 6 VermAnlG) and an investment product information sheet (§ 13 VermAnlG). Unless an exemption under §§ 2 to 2c VermAnlG applies, such as the crowdfunding exemption in § 2a VermAnlG, investment products must have a term of at least 24 months from first acquisition and an ordinary notice period of at least six months (§ 5a VermAnlG).

The crowdfunding exemption in § 2a VermAnlG only applies as long as the sales price of all investment products of the same issuer does not exceed EUR 6 million over twelve months, and only if the product is brokered via an internet service platform. A further condition is that the platform checks that an investor generally acquires no more than EUR 1,000 per issuer, or up to EUR 10,000 if, according to a self-declaration, the investor has freely available assets in the form of bank balances and financial instruments of at least EUR 100,000, or up to twice their average monthly net income according to a self-declaration, capped at EUR 25,000 (§ 2a(3) VermAnlG). These limits do not apply to investors that are corporations or certain GmbH & Co. KGs.

A bond issued as a bearer bond (§ 793 of the German Civil Code, BGB), by contrast, is a security; a registered bond (Namensschuldverschreibung) would in turn be an investment product (§ 1(2) no. 6 VermAnlG). Since the eWpG entered into force on 10 June 2021, a bearer bond can be issued without a certificate as an electronic security, by the issuer having it entered in an electronic securities register (§ 2(1) eWpG). Under § 2(2) eWpG, an electronic security has the same legal effect as a certificated security, unless the eWpG provides otherwise. A bond can also be subordinated; subordination is then a matter of the terms and conditions, not of the product category.

Feature	Subordinated loan	Digital bond (crypto security)
Legal nature	Investment product (§ 1(2) no. 4 VermAnlG)	Security (bearer bond, § 793 BGB, eWpG)
Prospectus-free volume	up to EUR 6 million over twelve months, only via a platform (§ 2a VermAnlG)	below EUR 12 million per issuer or offeror over twelve months (Article 3(2) Prospectus Regulation)
Information document	Investment product information sheet, max. three pages (§ 13 VermAnlG)	Securities information sheet, up to four pages (§ 4(3a) WpPG)
Term requirements	min. 24 months, six months' notice (§ 5a VermAnlG), unless an exemption under §§ 2 to 2c VermAnlG applies, such as § 2a	according to the terms and conditions
Proof of ownership	Contract and issuer records	Entry in the crypto securities register (§§ 16, 17 eWpG), with individual registration via a unique identifier (§ 17(2) sentence 2 eWpG)

How is the bond structured through a project company?

In energy projects, the issuer is often a dedicated project company, a so-called SPV (special purpose vehicle). The SPV holds the solar park, wind farm or battery storage system and earns the revenue from selling electricity. Bondholders have claims against this SPV, not against the developer's entire group, unless a guarantee or similar security has been agreed. This separates project risks from other business areas but also limits the assets available to creditors to the project.

Under § 2(1) of the Bond Act (SchVG), the terms and conditions describe the performance owed and the rights and obligations of the debtor and the creditors; for electronic bonds they must be accessible at the register keeper (§ 2(2) SchVG). For a crypto security, the eWpG refers to the terms of issue. Before registration, the issuer must deposit them with the register keeper so that anyone can inspect them (§ 5(1) sentence 1 eWpG); at the issuer's request, access can be restricted in accordance with an ordinance (§ 5(1) sentence 2 eWpG). Typical provisions cover the interest rate, interest dates, term, repayment, ranking, termination rights, use of proceeds and reporting duties.

Which denomination suits citizens, municipalities and family offices?

The denomination is the nominal amount of a single security. It determines who can realistically subscribe and which documents are needed. Small denominations open the offer to local residents and citizens of the region. Under Article 1(4)(c) Prospectus Regulation, an offer with a minimum denomination of EUR 100,000 is exempt from the prospectus requirement. Offers addressed solely to qualified investors (point (a)) or to fewer than 150 non-qualified investors per Member State (point (b)) are also exempt.

Target group	Typical denomination	What to consider
Citizens and residents	small amounts	Securities information sheet or prospectus; risk warnings; appropriateness test if distributed via an investment services firm (§ 63(10) WpHG)
Municipalities and municipal companies	medium to large amounts	check the budgetary and municipal law requirements of the relevant federal state case by case
Family offices and institutional investors	from EUR 100,000 possible	Prospectus exemptions under Article 1(4) Prospectus Regulation; check classification as a qualified investor

The former individual investment thresholds for retail investors in offers with a WIB (§ 6 WpPG, old version) were abolished by the German Location Promotion Act (Standortfördergesetz) 2026. Which further requirements apply to your offer, for example regarding the involvement of an intermediary, is clarified during structuring.

Which subscription documents are needed and how is interest paid?

For a prospectus-free public offer under Article 3(2) Prospectus Regulation, the offeror must, under § 4(1) WpPG, prepare a securities information sheet before the offer begins, file it with BaFin and publish it, unless an exemption under § 4(1) sentence 2 WpPG applies, for example for offers below EUR 100,000 over twelve months or where a PRIIPs key information document is required. The sheet may only be published once BaFin permits publication; BaFin states this within ten working days (§ 4(2) WpPG). For electronic securities, the sheet may be up to four A4 pages and must contain information on the technical design; for securities under the eWpG, the register keeper and the possibility of inspecting the register must also be stated (§ 4(3a) WpPG).

Terms and conditions or terms of issue, deposited with the register keeper
Securities information sheet or approved prospectus
Subscription form with amount, number of units and payment details
Risk warnings, consumer information and withdrawal notice where applicable

For a euro-denominated digital bond, interest and repayment are paid in euros, not in cryptocurrency. The crypto securities register shows the holder, with individual registration via a unique identifier (§ 17(2) sentence 2 eWpG); the link to the investor is made via the onboarding data. On this basis, the issuer or a paying agent transfers the amounts to the investor's bank account. For investors, the bond therefore works like a conventional security, just without a paper certificate.

How does the bond differ from municipal participation under the EEG?

§ 6 EEG does not regulate an investment but a financial participation of municipalities without consideration. Operators of onshore wind turbines with more than 1,000 kilowatts of installed capacity and operators of ground-mounted solar installations may offer affected municipalities a total of up to 0.2 cents per kilowatt hour as a unilateral payment. For wind turbines, municipalities whose territory lies at least partly within a radius of 2,500 metres around the tower centre are considered affected; for unincorporated areas, the district (Landkreis) responsible under state law is considered affected (§ 6(2) EEG). Operators can claim reimbursement of the amounts paid from the grid operator to the extent that they have received financial support under the EEG for the electricity quantities concerned (§ 6(5) EEG).

Municipal participation under § 6 EEG and a citizen bond are not mutually exclusive. Municipal participation is paid to the municipality or district without it investing any capital. With a bond, citizens, municipalities or family offices provide capital to the project and receive interest and repayment in return, but also bear the risk of default.

Are there public issuers of crypto securities?

According to a press release from its Ministry of Finance dated 30 June 2026, the state of Saxony-Anhalt was the first German federal state to issue a bond as a crypto security under the eWpG. The volume was EUR 100 million and the term two years. The bond was entered in DekaBank's crypto securities register, and settlement took place on the issue date (t+0). The issue does not concern energy projects but shows that public issuers also use the crypto securities register.

How heartstocks implements bonds for sustainable infrastructure

The asset classes heartstocks supports include ESG infrastructure such as energy and mobility. Suitable digital securities for this include fixed-rate bonds and bonus-interest bonds, among others. Depending on the asset, volume and target group, the issue is made via an SPV or as a direct issue. The asset does not need to exist yet: in project finance before completion, the issue itself funds construction. Tokenisation allows fractional units, making investments possible from small denominations.

The process has seven steps: initial meeting and product selection, structuring, documentation, regulatory filing, technical implementation, go-live with subscription period, and ongoing administration. heartstocks manages the filing of the WIB or the approval of a prospectus with BaFin on behalf of the issuer. The tokens are issued in the Nyala register and held in custody via Tangany. Investors are onboarded digitally with video identification, pay in euros via SEPA and do not need a wallet. A simple digital bond with subscription documents and a standard structure takes around six weeks if the client documentation is complete at kick-off.

The issuer manages distribution to investors. heartstocks supports placement and investor access with reporting and closing, and issuers see the pipeline and subscription status in real time. Banks, asset managers and distribution partners can be involved as referrers or distribution partners. Banks and savings banks use a ready-made platform with regulated partners for this, without their own IT project.

heartstocks has been active in the market since 2021 and, according to its own figures (as of 2026), has supported more than 15 tokenisation projects, structured more than EUR 200 million in volume and completed more than 5 regulatory approval processes (securities prospectus or subscription documents).

Investors in an energy bond bear the issuer risk, up to and including total loss. Returns depend on weather, electricity prices, grid connection and permits. Unlisted bonds are often only tradable to a limited extent. This article provides general information and does not replace legal or investment advice.

More at heartstocks: Seven-step project workflow Models for banks and savings banks How investors subscribe

Frequently asked questions

Is a digital bond for a solar park an investment product under the VermAnlG?

No, if the bond is issued as a bearer bond. Under § 1(2) VermAnlG, investment products are only investments that are not represented by securities within the meaning of the WpPG. A bearer bond issued as an electronic security under the eWpG is a security, and securities prospectus law applies to it. A registered bond, by contrast, would be an investment product (§ 1(2) no. 6 VermAnlG).

Up to what volume can an energy bond be offered without a prospectus?

Since 5 June 2026, public offers of securities are exempt if the total consideration in the EU over twelve months is less than EUR 12 million per issuer or offeror and there is no notification under Article 25 Prospectus Regulation (Article 3(2) Prospectus Regulation). Under Article 3(2c) Prospectus Regulation, the calculation includes all ongoing public offers and those made in the preceding 12 months, across all types and classes of securities; offers for which a prospectus was published or which fell under an exemption in Article 1(4) first subparagraph Prospectus Regulation are not counted. In Germany, offers of EUR 100,000 or more over twelve months then generally require a securities information sheet under § 4 WpPG, and BaFin must permit its publication.

Do investors need a crypto wallet?

Legally, an own wallet is not mandatory. The crypto security can be registered for the investor while a licensed crypto custodian safeguards the keys (§ 32(1) with § 1(1a) sentence 2 no. 6 KWG). With heartstocks, investors pay in euros via SEPA and do not need a wallet.

Does a citizen bond replace municipal participation under § 6 EEG?

No. § 6 EEG allows unilateral payments of up to 0.2 cents per kilowatt hour to affected municipalities or districts without them investing capital. A bond is an interest-bearing investment with a repayment claim and default risk. Both instruments can be used side by side.