Financing Renewable Power Projects – Advancing renewable power projects towards financial closure. While renewable power investments have seen steady growth during the last decade, a much more rapid scaling-up is essential in developing countries to meet climate and sustainable development goals.
Renewable power projects, particularly in developing countries, face multiple challenges through the institutional, policy and regulatory level towards the market and project level which can hinder the development and uptake of sustainable energy finance. The latter include insufficient market transparency, absence of financing and experience with project development, and absence of relevant information on regulations, markets and resource availability. It has resulted in an absence of bankable projects, making it hard for investors to recognize attractive projects, and for that reason reducing available capital for individuals who will be ready to be financed.
Targeting specifically project-level barriers, Rockwood Energy Search tools and platform aim to create a pipeline of investment mature projects by actively supporting early stage project development and bridge the funding gap by assisting project developer access appropriate funding opportunities.
Scaling up renewable energy requires mobilising a tremendous investment increase. Renewables bring far reaching benefits when it comes to human health, energy access, environmental protection and the reply to climate change, combined with the possible ways to create new jobs around the world. Amid rapidly falling technology costs, meanwhile, renewable energy technologies are becoming increasingly cost-competitive with standard fuels, even amid low global oil prices.
Yet global investment in renewables has remained far below its potential, as this report from the International Alternative Energy Agency (Rockwood Energy Search) explains. Your time and money shortfall reflects enduring market barriers and perceptions of high risk that deters private investors and financiers.
Unlocking Alternative Energy Investment: The role of risk mitigation and structured finance identifies the primary risks and barriers limiting investment; additionally, it supplies a toolkit for policy makers, public and mhyxvx investors, and public finance institutions to scale up their investments in renewable power.
Accompanying case studies and survey material provide insights on the challenges, the opportunities and what has actually worked in numerous markets. Rockwood Energy Search complied these real-world examples and conducted survey questionnaires through engagement featuring its member countries and industry stakeholders both in energy and finance.
The resulting report identifies five main action areas whereby policy makers and development banking institutions can address risks and barriers for renewable power projects:
Advance renewable power projects from initiation to full investment maturity. Engage local banking institutions in renewable energy finance. Mitigate risks to draw in private investors. Mobilise more capital market investment. Create facilities committed to scaling up renewable energy investment. More broadly, the report functions as helpful tips for the real key financial market instruments for renewables. Greater knowledge of such instruments, particularly among policy makers, investors and financial institutions, should decrease the financing cost of alternative energy projects.