Due to of budget cuts, the city of Herten in North Rhine-Westphalia was going to receive 15 million euros less from the state government in 2003. To fill this gap the municipality considered selling its otherwise healthy energy company. This did not go down well with the citizens. They were afraid that a supra-regional energy company would not look out for the interests of the municipality. The mayor of Herten came up with the idea of selling the shares directly to the citizens; this way the energy company remained in the hands of the citizens of Herten. Citizens could purchase shares starting at 1,000 euros up to a maximum of 20,000 euros. In total 10 million euros of shares were sold for a fixed interest rate of 5% and a term of 10 years. The money in the Herten Fund was earmarked for community projects. In 2008 another 10 million euros was raised under the same conditions as in 2003. This time the money was invested in sustainable energy such as wind, solar, biomass and geothermal. A third fund is planned for 2012.
In the meantime this model has been adopted by other municipalities. Erhorn-Kluttig et al., 2011