renewable energy project finance case study

An official website of the United States government

Here’s how you know

Official websites use .gov A .gov website belongs to an official government organization in the United States.

Secure .gov websites use HTTPS A lock ( Lock A locked padlock ) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

JavaScript appears to be disabled on this computer. Please click here to see any active alerts .

Renewable Energy Project Development Toolbox

Explore our full directory of project development resources in the table below. To help refine your search results, you may use the filter and sorting table features.

Please select one or both of the search filters to return the desired results. To select more than one option in a search filter, hold down the Control key on the keyboard while selecting the options. You can then sort the results by selecting the desired column heading. To start over, select "Reset Filters."

No results found

Clearing Barriers to Project Finance for Renewable Energy in Developing Countries: A Philippines Case Study

Research by: Jose Manuel Barroco and Maria Elena Baltazar Herrera  

Executive Summary

Developing countries must finance rapid growth with limited financial resources and without the mature capital markets, access to foreign capital, institutional capacity, and corporate governance of more developed countries. This challenge is compounded for renewable energy (RE) projects given their resource availability uncertainty, intermittency, long development cycles and typically smaller project sizes.  

Project finance (PF) can unlock much needed capital for RE projects in developing countries. Under corporate finance (CF), the traditional financing method for infrastructure project, the parent company provides the capital directly to the project or indirectly by providing credit support. PF, on the other hand, expands funding by raising capital exclusively against project assets, mainly future cash flows. PF also enhances project risk management and  transparency, and  can drive economic growth in developing countries.   

This paper examines factors driving the financing method choice between PF and CF in the power sector in the Philippines over the decade following enactment of the Philippine RE Law. A dataset containing 120 new power plants with detailed project-level data was created for this paper. One of the key PF drivers studied was the feed-in tariff (FIT), an above-market government-guaranteed fixed-rate per kilowatt-hour  available to eligible RE projects. While there are many studies on how the FIT impacts RE investment in developed countries, the literature is much scarcer on how FIT impacts the financing method choice in developing countries.   

After the RE Law was approved in 2008, RE capacity increased but RE share in energy mix decreased. FIT resulted in increased investments in RE, primarily in solar and wind.    

Results show that PF incidence is higher for baseload, high-capacity utilization, non-intermittent technologies; non-FIT projects with revenue contracts; and larger projects owned by public companies. Contrary to expectation, PF was less utilized for FIT-eligible RE, and projects owned by private or small investors. PF was utilized primarily by well-capitalized investors, and mostly by power and financial companies. The figure below shows the percentage of capacity project financed or corporate financed per technology.   

The table below summarizes the PF drivers, the research hypotheses and results.   

The Philippine FIT was perceived as financially attractive but tight deadlines, low technology-specific capacity caps and the absence of project-size limits increased revenue uncertainty, resulting in high concentration of project ownership and potential erosion of public support. Smaller investors that typically are less well capitalized and could have relied on PF had uncertainty been lower, were not able to finance their projects or had to sell a majority stake of the project to larger investors. These smaller investors are critical to the deployment of RE for economic, social and political reasons. Moreover, widening the base of investors results in increased competition, which increases social welfare.   

Policymakers can increase revenue certainty by (a) eliminating tight deadlines and avoiding low capacity caps; (b) defining a project-size limit to avoid crowding out by large projects which is especially important in the presence of FIT caps; (c) designing policies to increase the availability of long-term revenue contracts to energy investors by mandating distribution utilities and retail electricity suppliers to fully contract, not only their current demand, but also their future demand; (d) minimizing uncertainty in direct   support policies (DSP) implementation by defining clear and strict guidelines and targets; (e) mobilizing public support by quantifying DSP benefits and displaying them in the consumer’s bills; and (f) tailoring DSP’s to small investors, such as developers and community organizations, to broaden investor participation and increase    public support.   

Given the intrinsic uncertainty of RE and developing countries, policymakers need to design policies to minimize revenue uncertainty, enable PF and broaden the investor base.   

To cite this article:  Barroco, J., & Herrera, M. (2019). Clearing barriers to project finance for renewable energy in developing countries: A Philippines case study.  Energy Policy , 135, 111008.   

To access this article:   https://doi.org/10.1016/j.enpol.2019.111008    

Publishing Journal   

Energy Policy  is an international peer-reviewed journal published by Elsevier since 1973 addressing the policy implications of energy supply and use from their economic, social, planning and environmental aspects.    

CiteScore :  5.45;  Impact Factor:  4.88;  ABS:  2;  Google h-5 index:  91    

Thank you for visiting nature.com. You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

• View all journals
• Explore content
• About the journal
• Publish with us
• Sign up for alerts
• Published: 05 November 2018

A dynamic analysis of financing conditions for renewable energy technologies

• Florian Egli   ORCID: orcid.org/0000-0001-8617-5175 1 ,
• Bjarne Steffen   ORCID: orcid.org/0000-0003-2219-1402 1 &
• Tobias S. Schmidt   ORCID: orcid.org/0000-0002-7971-2187 1  

Nature Energy volume  3 ,  pages 1084–1092 ( 2018 ) Cite this article

7736 Accesses

204 Citations

73 Altmetric

Metrics details

• Business and management
• Climate-change mitigation
• Energy economics
• Energy policy

Renewable energy technologies often face high upfront costs, making financing conditions highly relevant. Thus far, the dynamics of financing conditions are poorly understood. Here, we provide empirical data covering 133 representative utility-scale photovoltaic and onshore wind projects in Germany over the last 18 years. These data reveal that financing conditions have strongly improved. As drivers, we identify macroeconomic conditions (general interest rate) and experience effects within the renewable energy finance industry. For the latter, we estimate experience rates. These two effects contribute 5% (photovoltaic) and 24% (wind) to the observed reductions in levelized costs of electricity (LCOEs). Our results imply that extant studies may overestimate technological learning and that increases in the general interest rate may increase renewable energies’ LCOEs, casting doubt on the efficacy of plans to phase out policy support.

This is a preview of subscription content, access via your institution

Access options

Access Nature and 54 other Nature Portfolio journals

Get Nature+, our best-value online-access subscription

24,99 € / 30 days

cancel any time

Subscribe to this journal

Receive 12 digital issues and online access to articles

111,21 € per year

only 9,27 € per issue

Rent or buy this article

Prices vary by article type

Prices may be subject to local taxes which are calculated during checkout

Similar content being viewed by others

Global supply chains amplify economic costs of future extreme heat risk

Yida Sun, Shupeng Zhu, … Dabo Guan

US oil and gas system emissions from nearly one million aerial site measurements

Evan D. Sherwin, Jeffrey S. Rutherford, … Adam R. Brandt

Realizing the full potential of behavioural science for climate change mitigation

Kristian S. Nielsen, Viktoria Cologna, … Kimberly S. Wolske

Data availability

The data displayed in Figs. 1 , 2 and 4 and used for calculations in Figs. 5 and 6 are available upon reasonable request to T.S.S.

IPCC: Summary for Policymakers. In Climate Change 2014: Mitigation of Climate Change (eds Edenhofer, O. et al.) (Cambridge University Press, 2014).

Climate Finance in 2013-14 and the USD 100 Billion Goal (OECD & CPI, 2015).

Polzin, F. Mobilizing private finance for low-carbon innovation – A systematic review of barriers and solutions. Renew. Sustain. Energy Rev. 77 , 525–535 (2017).

Article   Google Scholar  

Perspectives for the Energy Transition – Investment Needs for a Low-Carbon Energy System (OECD/IEA & IRENA, 2017).

Williams, J. H. et al. 2050: the pivotal role of electricity. Science 335 , 53–60 (2012).

Chu, S. & Majumdar, A. Opportunities and challenges for a sustainable energy future. Nature 488 , 294–303 (2012).

Schmidt, T. S. Low-carbon investment risks and de-risking. Nat. Clim. Change 4 , 237–239 (2014).

Hirth, L. & Steckel, J. C. The role of capital costs in decarbonizing the electricity sector. Environ. Res. Lett. 11 , 114010 (2016).

2017 Annual Technology Baseline (National Renewable Energy Laboratory, 2017).

Ondraczek, J., Komendantova, N. & Patt, A. WACC the dog: The effect of financing costs on the levelized cost of solar PV power. Renew. Energy 75 , 888–898 (2015).

Iyer, G. C. et al. Improved representation of investment decisions in assessments of CO 2 mitigation. Nat. Clim. Change 5 , 436–440 (2015).

Creutzig, F. et al. The underestimated potential of solar energy to mitigate climate change. Nat. Energy 2 , 17140 (2017).

Shrimali, G., Nelson, D., Goel, S., Konda, C. & Kumar, R. Renewable deployment in India: Financing costs and implications for policy. Energy Policy 62 , 28–43 (2013).

Trancik, J. et. al. Technology Improvement and Emissions Reductions as Mutually Reinforcing Efforts: Observations from the Global Development of Solar and Wind Energy (MIT, 2015).

Nemet, G. F. Beyond the learning curve: factors influencing cost reductions in photovoltaics. Energy Policy 34 , 3218–3232 (2006).

Bolinger, M. & Wiser, R. Understanding wind turbine price trends in the US over the past decade. Energy Policy 42 , 628–641 (2012).

Hall, S., Foxon, T. J. & Bolton, R. Investing in low-carbon transitions: energy finance as an adaptive market. Clim. Policy 17 , 280–298 (2017).

Brunnschweiler, C. N. Finance for renewable energy: An empirical analysis of developing and transition economies. Environ. Dev. Econ. 15 , 241–274 (2010).

Best, R. Switching towards coal or renewable energy? The effects of financial capital on energy transitions. Energy Econ. 63 , 75–83 (2017).

Best, R. & Burke, P. J. Adoption of solar and wind energy: The roles of carbon pricing and aggregate policy support. Energy Policy 118 , 404–417 (2018).

The Impact of Risks in Renewable Energy Investments and the Role of Smart Policies (Ecofys, 2016).

Mapping the Cost of Capital for Wind and Solar Energy in South Eastern European Member States (Ecofys, 2017).

Jacobsson, S. & Lauber, V. The politics and policy of energy system transformation - explaining the German diffusion of renewable energy technology. Energy Policy 34 , 256–276 (2006).

Steffen, B. The importance of project finance for renewable energy projects. Energy Econ. 69 , 280–294 (2018).

Gatti, S. Project Finance in Theory and Practice: Designing, Structuring, and Financing Private and Public Projects (Academic Press, Waltham, 2013).

Damodaran, A. Equity risk premiums (ERP): determinants, estimation and implications - The 2016 Edition. SSRN Electron. J . https://doi.org/10.2139/ssrn.2742186 (2016).

Eisenhardt, K. M. & Graebner, M. E. Theory building from cases: opportunities and challenges. Acad. Manag. J. 50 , 25–32 (2007).

Jiménez, G., Ongena, S., Peydró, J. L. & Saurina, J. Credit supply and monetary policy: Identifying the bank balance-sheet channel with loan applications. Am. Econ. Rev. 102 , 2301–2326 (2012).

Borio, C. & Zhu, H. Capital regulation, risk-taking and monetary policy: A missing link in the transmission mechanism? J. Financ. Stab. 8 , 236–251 (2012).

Altunbas, Y., Gambacorta, L. & Marques-Ibanez, D. Does monetary policy affect bank risk? Int. J. Cent. Bank 10 , 95–135 (2014).

Google Scholar  

Huenteler, J., Schmidt, T. S., Ossenbrink, J. & Hoffmann, V. H. Technology life-cycles in the energy sector - Technological characteristics and the role of deployment for innovation. Technol. Forecast. Soc. Change 104 , 102–121 (2016).

Pahle, M. & Schweizerhof, H. Time for tough love: towards gradual risk transfer to renewables in Germany. Econ. Energy Environ. Policy 5 , 117–134 (2016).

May, N. G. & Neuhoff, K. Financing Power: Impacts of Energy Policies in Changing Regulatory Environments DIW Berlin Discuss. Pap. No. 1684 (German Institute for Economic Research, Berlin, Germany, 2017).

Neuhoff, K. Large-scale deployment of renewables for electricity generation. Oxford Rev. Econ. Policy 21 , 88–110 (2005).

Nelson, D. in Renewable Energy Finance: Powering the Future (ed. Donovan, C. W.) 273–305 (Imperial College Press, London, 2015).

Yelle, L. E. The learning curve: historical review and comprehensive survey. Decis. Sci. 10 , 302–328 (1979).

Qiu, Y. & Anadon, L. D. The price of wind power in China during its expansion: Technology adoption, learning-by-doing, economies of scale, and manufacturing localization. Energy Econ. 34 , 772–785 (2012).

Rubin, E. S., Azevedo, I. M. L., Jaramillo, P. & Yeh, S. A review of learning rates for electricity supply technologies. Energy Policy 86 , 198–218 (2015).

Wright, T. P. Factors affecting the cost of airplanes. J. Aeronaut. Sci. 3 , 122–128 (1936).

Elton, E. J., Gruber, M. J., Agrawal, D. & Mann, C. Explaining the rate spread on corporate bonds. J. Finance 56 , 247–277 (2001).

Renewable Power Generation Costs in 2017 (IRENA, 2018).

Lehmann, P. & Söderholm, P. Can technology-specific deployment policies be cost-effective? The case of renewable energy support schemes. Environ. Resour. Econ. 71 , 475–505 (2018).

Geddes, A., Schmidt, T. S. & Steffen, B. The multiple roles of state investment banks in low-carbon energy finance: An analysis of Australia, the UK and Germany. Energy Policy 115 , 158–170 (2018).

Tietjen, O., Pahle, M. & Fuss, S. Investment risks in power generation: A comparison of fossil fuel and renewable energy dominated markets. Energy Econ. 58 , 174–185 (2016).

Campiglio, E. et al. Climate change challenges for central banks and financial regulators. Nat. Clim. Change 8 , 462–468 (2018).

Renewable Capacity Statistics 2017 (IRENA, 2017).

Definition und Marktanalyse von Bürgerenergie in Deutschland (Trend Research, 2013).

Chatham House Rule (Chatham House, 2002).

Hoppmann, J., Peters, M., Schneider, M. & Hoffmann, V. H. The two faces of market support—How deployment policies affect technological exploration and exploitation in the solar photovoltaic industry. Res. Policy 42 , 989–1003 (2013).

Asset Database (BNEF, 2017).

Long-Term Interest Rate Statistics for EU Member States (European Central Bank, 2018).

Global Trends in Renewable Energy Investment 2017 (Frankfurt School-UNEP & BNEF, 2017).

Eisenhardt, K. M. Building theories from case study research. Acad. Manag. Rev. 14 , 532–550 (1989).

Statutory Corporate Income Tax Rate (OECD, 2018).

Walker, D. & Myrick, F. Grounded theory: An exploration of process and procedure. Qual. Health Res. 16 , 547–559 (2006).

Glaser, B. G. Emergence vs Forcing: Basics of Grounded Theory Analysis (Sociology Press, Mill Valley, CA, USA, 1992).

Nordhaus, W. D. The perils of the learning model for modeling endogenous technological change. Energy J. 35 , 1–14 (2014).

Lindman, Å. & Söderholm, P. Wind power learning rates: A conceptual review and meta-analysis. Energy Econ. 34 , 754–761 (2012).

Miles, I. Patterns of innovation in service industries. IBM Syst. J. 47 , 115–128 (2008).

Elche-Hotelano, D. Sources of knowledge, investments and appropriability as determinants of innovation: An empirical study in service firms. Innov. Manag. Policy Pract. 13 , 224–239 (2011).

Huenteler, J., Niebuhr, C. & Schmidt, T. S. The effect of local and global learning on the cost of renewable energy in developing countries. J. Clean. Prod. 128 , 6–21 (2016).

Download references

Acknowledgements

The authors thank M. Jäger, M. Pahle, F. Polzin, L. Reile and O. Tietjen from the INNOPATHS project, participants of the 2017 oikos Finance Academy at the University of Zurich, participants of the 41st IAEE International Conference in Groningen (2018) and members of ETH Zurich’s Energy Politics Group for helpful comments on earlier drafts of the paper. This work was supported by the Swiss State Secretariat for Education, Research and Innovation (SERI) under contract number 16.0222. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Swiss Government. This work was conducted as part of the European Union’s Horizon 2020 research and innovation programme project INNOPATHS under grant agreement no. 730403.

Author information

Authors and affiliations.

Energy Politics Group, Department of Humanities, Social and Political Sciences, ETH Zurich, Zürich, Switzerland

Florian Egli, Bjarne Steffen & Tobias S. Schmidt

You can also search for this author in PubMed   Google Scholar

Contributions

T.S.S., B.S. and F.E. developed the research idea. F.E., B.S. and T.S.S. conducted the investor interviews, collected, analysed and interpreted the data, and wrote the manuscript. T.S.S. secured project funding.

Corresponding authors

Correspondence to Florian Egli , Bjarne Steffen or Tobias S. Schmidt .

Ethics declarations

Competing interests.

The authors declare no competing interests.

Additional information

Publisher’s note: Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Supplementary information

Supplementary information.

Supplementary Note 1, Supplementary Figures 1–5, Supplementary Tables 1–7, Supplementary References

Reporting summary

Rights and permissions.

Reprints and permissions

About this article

Cite this article.

Egli, F., Steffen, B. & Schmidt, T.S. A dynamic analysis of financing conditions for renewable energy technologies. Nat Energy 3 , 1084–1092 (2018). https://doi.org/10.1038/s41560-018-0277-y

Download citation

Received : 04 April 2018

Accepted : 01 October 2018

Published : 05 November 2018

Issue Date : December 2018

DOI : https://doi.org/10.1038/s41560-018-0277-y

Share this article

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

This article is cited by

Sustainable pathways towards universal renewable electricity access in africa.

• Rebecca Peters
• Jürgen Berlekamp
• Christiane Zarfl

Nature Reviews Earth & Environment (2024)

Wind power deployment and the impact of spatial planning policies

• Jan-Niklas Meier
• Paul Lehmann
• Stephan Wedekind

Environmental and Resource Economics (2024)

Greener and cheaper: green monetary policy in the era of inflation and high interest rates

• Nicolás Aguila
• Joscha Wullweber

Eurasian Economic Review (2024)

Financing renewable energy: policy insights from Brazil and Nigeria

• Abdulrasheed Isah
• Michael O. Dioha
• Hemen Mark Butu

Energy, Sustainability and Society (2023)

The momentum of the solar energy transition

• Femke J. M. M. Nijsse
• Jean-Francois Mercure
• Hector Pollitt

Nature Communications (2023)

Quick links

• Explore articles by subject
• Guide to authors
• Editorial policies

Sign up for the Nature Briefing newsletter — what matters in science, free to your inbox daily.

IRENA and CPI (2023), Global landscape of renewable energy finance, 2023, International Renewable Energy Agency, Abu Dhabi.

Copy citation  Copied

https://mc-cd8320d4-36a1-40ac-83cc-3389-cdn-endpoint.azureedge.net/-/media/Files/IRENA/Agency/Publication/2023/Feb/IRENA_CPI_Global_RE_finance_2023.pdf?rev=8668440314f34e588647d3994d94a785

Copy url  Copied

Global landscape of renewable energy finance 2023

• Executive Summary

Global investment in energy transition technologies, including energy efficiency, reached a record high of USD 1.3 trillion in 2022. However, annual investments need to at least quadruple to remain on track to achieve the 1.5 ° C Scenario in IRENA’s World Energy Transitions Outlook 2023 . Investment in renewable energy was also unprecedented – at USD 0.5 trillion – but represented less than one third of the average investment needed each year. Investments are also not flowing at the pace or scale needed to accelerate progress towards universal energy access; investments in off-grid renewable energy solutions in 2021 – at USD 0.5 billion – fell far short of the USD 2.3 billion needed annually in off-grid solar products alone (not including mini-grids).

This third edition of the biannual joint report by the International Renewable Energy Agency (IRENA) and Climate Policy Initiative (CPI) analyses investment trends by technology, sector, region, source of finance and financial instrument in the period 2013-2020 and provides preliminary data for 2021-2022. It identifies financing gaps to support informed policy making for the deployment of renewables at the scale needed to accelerate the energy transition.

The report finds that investments have become further concentrated in specific technologies and uses, and in a small number of countries/regions. It underscores the need to direct public funds to regions and countries that have considerable untapped potential but find it difficult to attract investment. Funding must be focused on supporting energy transition infrastructure development, as well as enabling policy frameworks to drive investment and address persistent socio-economic gaps.

Additional analyses

Global geothermal market and technology assessment, related content.

Record Growth in Renewables, but Progress Needs to be Equitable

Renewables Jobs Nearly Doubled in Past Decade, Soared to 13.7 Million in 2022

Boosting the Global Geothermal Market Requires Increased Awareness and Greater Collaboration

G7 Communiqué Echoes IRENA's Call for Rapid Deployment of Renewables

Under IRENA's ETAF, Masdar and AIIB Reach Financial Close on 3 Uzbek Solar Projects

POPULAR CONTENT

07 March 2023 Climate Change , Publications , TCFD

The 2023 Climate Risk Landscape

17 May 2022 Events , Roundtables

UNEP FI Global Roundtable 2022

28 November 2022 Publications , SDGs and Impact

Portfolio Impact Analysis Tools for Banks (Version 3)

05 December 2023 | Banking Climate Change Net Zero Banking

Green finance case studies in energy and industry

The transition to net zero in energy and industry is a huge business opportunity for banks. Annual clean energy investments to meet growing energy demand in emerging and developing economies alone will represent an annual investment opportunity of as much as USD 2.8 trillion by the early 2030s. On energy and industry day at COP28, the Net-Zero Banking Alliance is highlighting recent examples of financing provided or facilitated by NZBA member banks in these key sectors in developed and emerging economies. They are taken from NZBA’s recent 2023 Progress Update .

Deutsche Bank arranges USD 670 million for battery energy storage in Texas

As lead arranger and joint bookrunner for three project financings from December 2022 to May 2023, Deutsche Bank raised USD 670 million for a loan facility for Plus Power to construct three fully merchant, utility-scale, battery energy storage projects in Texas totalling 700MW in capacity. Deutsche Bank committed to underwrite a large portion of the facility while syndicating to a large group of lenders pre- and post-closing.

Battery storage projects are one of the most rapidly growing asset classes in the clean tech industry. Total battery storage capacity in the U.S. climbed to 12.7 gigawatts by the end of the second quarter of 2023, according to S&P Global, up 61% from the year before.

Read more on Deutsche Bank’s net-zero targets

Société Générale leads on USD 1.2 billion loan for wind, solar, and battery storage in India 

Société Générale acted as mandated lead arranger and hedge provider for a USD 1.2 billion green loan for ReNew Power, one of India’s largest renewable energy developers.

ReNew will use the proceeds from the loan, which reached financial close in early 2023, to build 900 megawatts of wind capacity, 400 megawatts of solar, and a battery capable of storing 100 megawatt hours of electricity. The project will be located across the states of Maharashtra, Karnataka, and Rajasthan in India. This is one of the first utility-scale, “round the clock” projects combining wind, solar and battery technology in India.

The transaction supports Société Générale’s target of facilitating EUR 300 billion in sustainable finance by 2025.

Read more on Société Générale’s net-zero targets

Standard Chartered co-finances Indonesia’s energy transition

In 2021, Standard Chartered helped finance a 145-megawatt floating solar photovoltaic power plant on the Cirata reservoir in West Java, issuing a USD 112 million 16-year project finance facility alongside two other lenders. On completion, it will be the first floating solar project in Indonesia and the biggest in Southeast Asia.

The Cirata project is also the first from an Independent Power Producer (IPP) in Indonesia to receive fully uncovered long-term loans from commercial banks without development finance institution or export credit agency involvement. The model this transaction has created could unlock significant amounts of further financing for Indonesian clean power markets and support Indonesia’s goal to generate 23% of its electricity from renewable sources by 2025.

The project is expected to power 50,000 homes and avoid 214,000 tons of CO 2 emissions annually, while contributing to the creation of up to 800 jobs.

Standard Chartered’s contribution to this transaction supports its target of mobilising US$ 300 billion in sustainable finance by 2030.

Read more on Standard Chartered’s net-zero targets

Mizuho supports early-stage technology for reducing emissions from heavy industry

In March 2023, Mizuho Bank announced a USD 5 million equity investment in MCi Carbon, an Australian clean technology company engaged in decarbonising global industries through Carbon dioxide Capture and Utilization (CCU).

MCi brings together carbon dioxide emissions from steel, cement, fertilizer, and mining facilities with a variety of feedstocks, including industrial by-products such as steel slag, mine tailings, and low-grade minerals, in a chemical process called mineral carbonation. In this way, it transforms carbon dioxide and waste into a variety of valuable and saleable inputs for building materials and other products.

This equity investment is part of a broader push from Mizuho to invest JPY 50 billion over the next ten years in companies developing early-stage technologies that can enhance environmental and social sustainability, including at the start-up and demonstration stages.

Read more on Mizuho’s net-zero targets

Morgan Stanley leads €1.5 billion equity capital raise for green steel producer 

In September this year, H2 Green Steel announced that it had secured EUR 1.5 billion (USD 1.6 billion) in equity financing to finance Europe’s first green steel plant. Since launch in 2021, H2 Green Steel has raised more than EUR 1.8 billion (USD 1.9 billion) of equity in three financing rounds. The company closed its series A equity round of EUR 86 million (USD 92 million) in May 2021 and announced the close of its series B1 round of EUR 260 million (USD 278 million) in October 2022. Morgan Stanley advised the company on the series B1 and latest series B2 rounds for this private placement.

H2 Green Steel aims to be the first industrial-scale end-to-end green steel producer and, on completion, claims its green-hydrogen-powered Boden plant will achieve CO 2 emissions reductions of around 95% compared to conventional European producers, yielding the greenest steel in the world.

The transaction forms part of Morgan Stanley’s pledge to mobilise at least USD 750 billion for low-carbon solutions by 2030.

Read more on Morgan Stanley’s net-zero targets

• Online banking
• Private banking online
• Local sites

Case Study: Project financing for Vietnam’s largest solar plant through USD186 million ADB loan structure

11 Oct 2021

Find out how Standard Chartered financed the country’s largest renewable energy project by offering debt structuring expertise and long-term interest rate hedging.

The government of Vietnam is seeking to transform the country’s energy supply and power infrastructure. Under a master power development plan 1 , the country has outlined a roadmap for a transition from fossil fuels to renewables, and an upgrade of the national grid to aid the safe and efficient distribution of electricity. As of 2020, solar and wind capacity in Vietnam was 16.6 gigawatts (GW) and 0.6 GW, respectively. By 2030, Vietnam intends to increase solar capacity to 18.6 GW and wind capacity to 18.0 GW. 2

A significant part of this plan is the 257MW Phu Yen Solar Power Plant Project.  Located in Hoa Hoi, Phu Yen Province, it is the largest operating solar plant in Vietnam, and one of the largest in South East Asia. The project is expected to help reduce 123,000 tonnes of carbon dioxide emissions per annum

The facility is operated by majority owner B.Grimm Power, a core client of Standard Chartered Bank, and Truong Thanh Vietnam.

Deal structure and Standard Chartered’s role

The Asian Development Bank (ADB) provided direct financing under an A-loan facility, with Standard Chartered (and other regional commercial lenders) participating in the ADB B-loan facility.

To mitigate residual risks under the Power Purchase Agreement, an appropriate risk allocation structure was implemented  between the parties.

Standard Chartered is the only international lender involved, offering debt structuring expertise and long-term interest rate hedging through its onshore operations in Vietnam.

The deal is Asia’s first green B loan certified by the Climate Bonds Initiative. 3

This deal has set a precedent for the successful funding of renewable energy projects in the region. Projects that may have struggled to attract capital under more traditional financing structures are now more likely to progress, further increasing renewables capacity in a region still heavily reliant on coal to produce electricity. 

The financing structure paves the way for further development of the green energy sector in Asia, with Standard Chartered already working with B.Grimm Power on a follow-up deal using the same structure.

Standard Chartered is the first international bank to structure such a large-scale renewable energy transaction in this growing sector in Vietnam.  The transaction has been awarded the Green Project of the Year Award in Vietnam ( The Asset ) and Standard Chartered Bank awarded Project Finance House of the Year in Vietnam ( The Asset ) – further acknowledgement of Standard Chartered’s commitment to financing a low-carbon future.

1 https://www.globalcompliancenews.com/2021/03/13/vietnam-key-highlights-of-new-draft-of-national-power-development-plan-draft-pdp8-04032021-2/ 2 https://www.eia.gov/todayinenergy/detail.php?id=48176 3 https://www.climatebonds.net/Certification/Phu-Yen-TTP

Financial markets insights

Turning expertise into actionable insights. Explore our views on what to watch out for in today’s financial markets.

Back to news and views

Find your local site, united kingdom, standard chartered bank, hq.

1 Basinghall Avenue, London, EC2V 5DD. In the United Kingdom

+44 207 885 888 8

Escritório de Representação

Edifício Kilamba, 7º Andar, Avenida 4 de Fevereiro, Marginal de Luanda, Distrito Urbano da Ingombota, Luanda, Angola

+244 222 63 68 00

Argentina Rep Office

Av. Leandro N. Alem 855 – 32nd Floor, Buenos Aires (C1001AAD), Argentina.

+54 11 3724 0000

Standard Chartered Bank Australia Branch

Level 5, 345 George Street, Sydney NSW 2000, PO Box 7042, Sydney NSW 2001, Australia.

+61 2 9232 9315

MENAP Online banking

Principal office

Building No. 180, Road 383, Block 315, Government Road, Manama. PO Box 29

+973 172 236 36

Asia Online banking

Standard Chartered Bank

67 Gulshan Avenue, Gulshan, Dhaka 1212, Bangladesh.

+880 288 330 03

Africa Online banking

Standard Chartered House

5th Floor Standard House Building, The Mall, Queens Road, PO Box 496, Gaborone, Botswana.

+267 361 5800

Brazil Office

Avenida Brigadeiro Faria Lima, 3600 – 7th floor, Sao Paulo, 04538-132, Brazil.

+55 112 789 680 0

• Brunei Darussalam

51-55, Jalan Sultan, Omar Ali Saifuddien, Jalan Sultan Complex, Bandar Seri Begawan, Brunei Darussalam, BS8811. 

+673 265 8000

Phnom Penh Representative Office, Unit G-02, Himawari Hotel, No. 313, Preah Sisowath Quay, Phnom Penh, Cambodia.

+855 232 127 29

Head office

1143 Boulevard de la Liberte, Douala, BP 1784, Douala, Littoral Region, Cameroon.

+237 334 352 00

• Chinese Mainland

Standard Chartered Tower

201 Century Avenue, Pudong , Shanghai 200120, China.

(86-755)2589 2333

Representative office

Carrera 7,71-52, Torre A Oficina, 702 Bogota, Colombia.

+57 132 640 30

• Côte d’Ivoire

Immeuble Fakhry

Standard Chartered Bank Cote d’Ivoire, 23 Boulevard de la République, Abidjan 17, 17 B.P. 1141, Cote d’Ivoire.

+225 203 032 00

Standard Chartered Bank - Representative Office

Cairo Festival City, Business Park, Building 12B03/A, South 90th Street, New Cairo, Egypt

+202 248 011 50

Falkland Islands

Ross Road, Stanley, Falkland Islands, FIQQ 1ZZ.

+ 500 222 20

Standard Chartered Bank AG France Branch

32, Rue De Monceau, Paris 75008, France.

+33 153 758 300

Standard Chartered Bank AG

Taunusanlage 16, 60325 Frankfurt am Main, Deutschland/Germany.

+49 (0)69 770 750-0

Standard Chartered Bank Building, 6 John Evans Atta Mills High Street, P.O. Box 768, High Street, Accra, Ghana.

+233 302 740 100

Standard Chartered Trust (Guernsey) Ltd

Bordeaux Court, Les Echelons, South Esplanade, St. Peter Port, Guernsey.

+44 148 172 178 7

Standard Chartered Bank Building

32nd Floor, 4-4A Des Voeux Road Central, Hong Kong.

+852 282 033 33

Crescenzo, C-38/39 ‘G’ Block, Bandra Kurla Complex, Bandra East, Mumbai, 400 051, India. 

+91 22 6115 7000

Menara Standard Chartered, Jl. Prof. DR. Satrio No.164, Jakarta 12930, Indonesia.

+62 21 2555 0000

Standard Chartered Iraq

SCB Baghdad, East Karadah, Baghdad , Iraq

+964 750 559 9022

SC Ventures Israel Office

WeWork ToHa, 11th Floor, Yigal Alon St 114, Tel Aviv-Yafo, 7644320, Israel

Standard Chartered Bank Japan Head Office

Sanno Park Tower 21st floor, 2-11-1 Nagata-cho, Chiyoda-ku, Tokyo, 100-6155 Japan.

+81 3 5511 1200

Europe Online banking

Standard Chartered Bank Jersey Branch

Jersey Branch, PO Box 80, 15 Castle Street, St Helier, Jersey JE4 8PT, Channel Islands. 

+44 1534 704 000

Standard Chartered Chiromo

Number 48, Westlands Road, PO Box 30003 – 00100, Nairobi, Kenya.

+254 203 293 900

Representative Office, House No. 099/05 Ban Naxay, Nongbone Street, Hom # 2 (Postal Address: P.O. Box 6895), Vientiane Capital, Lao P.D.R.

+856 21 413032

Main Office

Maarad Street, Atrium Building, Downtown, Beirut, Lebanon.  

+961 454 247 4

Unit 807, 8/F Office Tower, Macau Landmark, Avenida de Amizade, Z.A.P.E. 

+853 287 861 11

Standard Chartered Bank Malaysia Berhad

Level 26, Equatorial Plaza Jalan Sultan Ismail 50250 Kuala Lumpur, Malaysia

+60377118888

Standard Chartered Bank, Mauritius

6th Floor, Standard Chartered Tower, 19 Bank Street, 72201 Cybercity Ebene, Mauritius

+230 403 6500

Myanmar Representative Office, Suite #13-05 (A), Junction City Office Tower, Bo Gyoke Aung San Road, Pabedan Township, Yangon, Myanmar

+95 1 9253441

Standard Chartered Bank Nepal Limited

Naya Baneshwore, Madan Bhandari Marg, Ward No.34, Kathmandu Metropolitan City, Bagmati Zone, Kathmandu, Nepal. 

+977 1 4782333

Head Office

142, Ahmadu Bello Way, Victoria Island, Lagos, Nigeria.

+234 1 2368800

Super Plaza Building - 6th Floor Al Azaiba, Sultanate of Oman

+968 224773669

Standard Chartered Bank (Pakistan) Limited

P.O. Box No. 5556, I.I Chundrigar Road, Karachi 74000, Pakistan.

+92 21 3245 0000

Philippines

Standard chartered bank philippines branch.

SkyPlaza Bldg., 6788 Ayala Avenue, Makati City, 1226 Philippines.

+632 8867888

Standard Chartered Global Business Services

Sp. z o.o., The Warsaw HUB, Rondo Daszyńskiego 2b 00-843 Warsaw, Poland

+48 22 359 7000

Standard Chartered Bank, Qatar

Principal Office address: Burj Doha, Al Corniche Street PO Box 29 Doha State of Qatar

+974 44658 555

Saudi Arabia

Standard Chartered Capital 7th Floor, Al Faisalliah Tower King Fahad Street PO Box No. 295522 Riyadh 11351 Kingdom of Saudi Arabia

+966 11 2888540

Sierra Leone

Lightfoot boston street branch.

9 & 11, Lightfoot Boston Street, Freetown, Sierra Leone.

+232 222 250 21

Standard Chartered Bank Singapore Branch & Standard Chartered Bank (Singapore) Limited

Marina Bay Financial Centre (Tower 1), 8 Marina Boulevard, Level 27, Singapore, 018981

+65 6596 8888

South Africa

Standard chartered bank, johannesburg branch.

2nd Floor, 115 West Street Sandton, 2196 Gauteng, South Africa

+27 11 217 6600

South Korea

Standard chartered bank korea.

47 Jongno, Jongno-gu, Seoul, 03160, Republic of Korea.

+822 1577 7744

37 York Street, Colombo-01, Sri Lanka.

+94 112480480

Standard Chartered Bank AG Sweden Branch

Södra Kungstornet, Kungsgatan 33, 12th floor, 111 56 Stockholm, Sweden.

+46 8 451 02 00

Standard Chartered Bank (Taiwan) Limited

No. 168, Dunhua N. Rd., Songshan Dist., Taipei City , Taiwan, R.O.C.

+886 227 166 261

International House

Standard Chartered, International House Building, Corner Garden Avenue, Ohio Street, P.O. Box 9011, Dar-es-Salaam

+022 216 499 9

Standard Chartered Bank (Thai) PCL

100 North Sathorn Road, Silom, Bangrak, Bangkok, Thailand, 10500.

+66 2724 40 00

8 Ecowas Avenue, Banjul, The Gambia.

+220 420 227 5

Standard Chartered Bank Turkey

Buyukdere Cad. Yapi Kredi Plaza C Blok, Kat 15, Levent, Istanbul, 34330 Turkey.

+90 212 339 37 00

Standard Chartered Bank Building, 5 Speke Road, PO Box 7111, Kampala, Uganda.

+256 200 524 100

• United Arab Emirates

Standard Chartered UAE

Standard Chartered Tower Downtown Dubai, P.O Box 999 Dubai, UAE

+971 600 522 288

United States

Standard chartered bank, usa.

1095 Avenue of the Americas, New York, NY 10036.

+1 (212) 667 0700

Standard Chartered Bank (Vietnam) Ltd

Room 1810-1815, Level 18, Keangnam Hanoi Landmark Tower, Pham Hung Road, Me Tri Ward, Nam Tu Liem District, Hanoi, 10000, Vietnam.

+84 2493 680 00

PO Box 32238, Cairo Road, Lusaka, 10101, Zambia.

+260 966 999 990

1st Floor, Africa Unity Square, Cnr Nelson Mandela, Sam Nujoma Street

+263 475 285 2-8

Find your local website

We have online banking in the following locations

FIN640 Renewable Energy Finance

Course Catalog Description

Introduction

This course provides an in-dept knowledge for students in the range of established practices, procedures and tools in finance that can be used to address the adverse effects of climate change on corporations from both an investor, bank, and corporate perspective. The goal of this course is also to increase the understanding of graduate students of the financing and investment decisions as they relate to renewable energy projects and renewable energy companies. As a result, graduate students will learn about the key topics in renewable energy finance such as the access to renewable energy, the business case for clean energy, project finance, and valuation of renewable energy firms. This course will provide the graduate students a solid foundation and introduction to this most important topic. Students taking this course will not only have the knowledge about renewable energy finance they need, but the understanding to put that knowledge to practical use.

Prerequisites: Basic knowledge in Corporate Finance, for instance, at the level of BT 321 or equivalent. Basic knowledge in Sustainable Finance, for instance, at the level of FIN540 or equivalent.

Instructors

More Information

Course Objectives

Students will:

• Develop the ability to describe numerous fundamental topics in renewable energy financing in clear and simple detail;
• Learn the skills required to prepare a sustainable energy proposal for funding;
• Gain knowledge about project finance, which is a growing financial technique that depends on the risk-adjusted cash flows of individual renewable energy projects, rather than the balance sheet, to support funding, while employing a diverse set of inter-disciplinary skills;
• Learn how to use financial modeling to better understand the economics, risks, and sensitivity of a renewable energy project.

Course Outcomes

By the end of the semester, you should be able to

• Explain in clear and concise detail many foundational concepts in renewable energy finance;
• Discuss some of the key opportunities and challenges corporation are facing in their transition to renewable energy;
• Build financial models for evaluating renewable energy projects and demonstrate good financing and modeling techniques in the development of these models;
• Apply renewable energy finance mechanisms to a real-life investment case study;
• Discuss opportunities, challenges, and enabling conditions for corporations to benefit from growing renewable energy investment opportunities.
• The main resource for this course will be the case course pack and readings posted on Canvas. I do not require a textbook for this course.

Recommended Textbooks, Articles and readings

• The Rise of Green Finance in Europe Opportunities and Challenges for Issuers, Investors and Marketplaces by Marco Migliorelli and Philippe Dessertine, Palgrave Macmillan. ISBN-13: 978-3-030-22510-0
• Renewable Energy Finance: Theory and Practice. 1st Edition by Santosh Raikar and Seabron Adamson. Elsevier. ISBN-13: 978-0128164419
• Energy Finance and Economics: Analysis and Valuation, Risk Management, and the Future of Energy. 1st Edition by Betty Simkins and Russel Simkins. John Wiley & Sons, Inc. ISBN- 13: 978-1118017128
• Introduction to Project Finance in Renewable Energy Infrastructure: Including Public- Private Investments and Non-Mature Markets 1st Edition by Farid Mohamadi. Springer, ISBN-13: 978-3030687397
• Energy Project Financing: Resources and Strategies for Success by Eric Woodroof and Albert Thumann, Fairmont Press, ISBN-13: 9781420083866.
• Students are required to purchase a set of case studies related to the different topics of renewable energy finance via a course pack that is made available for purchase at the website of the Harvard Business Publishing Education. Students need to sign in as a student to access the materials of this course pack. The case studies covers important topics such as (1) energy efficiency investments, (2) valuation and acquisition of renewable energy companies, (3) regulation risk in energy investments, (4) renewable energy startups, and (5) private equity investment in renewable energy companies.

To familiarize graduate students with the challenges and opportunities that arises through the implementation of a renewable energy strategy at the organizational and institutional levels, I will employ a mix of lectures, guest lectures, and applied cases.

Course Organization

The main concepts of renewable energy finance will be reviewed in class. My classes will also include case studies and presentations by industry professionals that integrate class material with real life decisions. I will use Canvas extensively to post reading material, presentation slides and for other communication.

Attendance and class participation; Case study, Midterm exam and final project

Attendance and class participation: We will follow a lecture and discussion format in the class. You are expected to come prepared to discuss the material assigned for each class. Your class participation is crucial to successful learning. Active class participation will also make the class discussion lively and exciting. I will keep track of your attendance and the comments that you make during class discussions. Regular attendance and active participation will constitute 20% of the grade.

Midterm exam: The midterm will evaluate the material covered in the first nine weeks of the class. The midterm constitutes 30% of the grade. Midterm will be based on all the material covered during the first nine weeks of the semester (lectures, lectures, videos, handouts, homework assignments, and case discussions). The precise details of the material covered by midterm will be announced in class closer to the exam. Midterm will be open book and open notes. There will be a makeup on the Midterm if you miss the midterm for legitimate reasons.

Homework assignment: There will be two homework assignments. The homework assignment will be submitted on Canvas. The first homework assignment will be a homework assignment about renewable energy economics. The first homework assignment constitutes for 15% of the grade. The second homework assignment will be a homework assignment about the modeling project cash flows and debt service of renewable energy projects. The second homework assignment constitutes for 15% of the grade. The two homework assignments together will constitute for 30% of the grade.

Final project

Final project (Selection of topic and group discussions)

In the first class, I will post many interesting topics in renewable energy finance on canvas. Please see Appendix 1 that is attached to this syllabus. The groups may choose any of those topics. This is a group project. The groups are also invited to produce a topic of their own and choose that as the topic of their group project. I expect the groups to meet multiple times in the various stages of their work on the project:

• Choice of project
• Selection of subtopics and relevant analyses.
• Allocation of work on the presentation, presentation slides, and project report. The presentation slides and the project report from each group. All groups will prepare and make a 10-minute presentation in class.

Final project presentation (Guidelines for presentation)

Each group will put together a well-organized presentation that takes no more than 20 minutes. Please involve multiple members of your group in the presentation. The slide-deck for the presentation should be uploaded on Canvas prior to the beginning of the session in which the project will be discussed. The entire group will be responsible for discussing the key issues of the project and preparing the presentation slides as well as the plan for the presentation. The group members will also be ready to answer questions on their project from the other students in the class. The maximum grade for the presentation will be 10%. See below for a general rubric for the grading of the project presentation. The group grade of 10% for the presentation will be allocated as follows.

• The novelty of the topic chosen, and the ideas presented: 2%
• The clarity and effectiveness of the organization of the presentation: 3%
• Use of data and relevant analysis: 3%
• The quality of Q&A: 2%

Final project report (Guidelines for project report)

Each group will put together a short report (6 pages double-spaced) presenting the central ideas that they have learned during the semester on their topic from their readings and group discussions. The report should be clear and well-organized. See below for a general rubric for the grading of the project report. The group grade of 10% for the report will be allocated as follows.

• Creativity in the topic choice and ideas discussed and analyzed: 2%
• Use of relevant data and analysis: 3%
• Integration of related topics learned in the course in the report: 3%
• Relating the concluding analysis to important ideas in sustainable finance: 2%

Lecture Outline

December 2023 Newsletter

Computational semantics in financial services.

Risk assessment of financing renewable energy projects: A case study of financing a small hydropower plant project in Serbia

• Spasenic, Zeljko
• Makajic-Nikolic, Dragana
• Benkovic, Sladjana

This study proposed a novel approach for conducting the credit risk assessment of financing a small hydropower plant (SHPP) project in Serbia via the failure mode and effects analysis (FMEA), which was modified by the Dempster-Shafer Theory (DST). A qualitative analysis of financing the SHPP project was performed to identify and describe the risk events that may cause loan default. To conduct the risk assessment, experts with experience in SHPP project financing in Serbia were required to evaluate the occurrence and severity of the identified risk events and their ability to detect them. Considering the epistemic uncertainty to which they were exposed, the experts assigned multiple ratings and their mass functions according to DST. Thereafter, the proposed FMEA-DST methodology was applied to identify the risk events that required the special attention of credit risk managers. Finally, adequate mitigation strategies that will reduce the credit risk of SHPP project finance in Serbia were proposed for the identified risk events. The research results demonstrated the effectiveness of the proposed approach as a comprehensive framework, which credit risk managers can employ to evaluate project finance requests.

• Credit risk management;
• Renewable energy;
• Risk analysis;
• Dempster-Shafer theory;

ENV 635b () / 2023-2024

Renewable energy project finance.

• Daniel Gross
• 2023-2024 Fall Schedule
• 2023-2024 Spring Schedule
• 2023-2024 By Faculty Member
• 2023-2024 By Subject of Instruction By System
• Yale Course Information
• Yale Academic Bulletins

Connect with us

• Request Information
• Visit Virtually