Development of a Techno-economic Framework for Renewable Energy Project Financing

Abstract

Till date, several efforts have been dedicated to renewable energy (RE) technology selection, but this technology financing has been given limited attention, especially in Africa. This problem has resulted in several RE projects failure in Africa. This study, therefore, presents a techno-economic framework for RE technology financing. The framework uses a SWARA (Step-wise weight assessment ratio analysis) method to determine criteria importance and a VIKOR (Vlse Kriterijumska Optimizacija Kompromisno Resenje) method to rank Public Private Partnership (PPP) models for RE technology financing. Using a solar photovoltaic microgrid system as a case study, the framework applicability was tested. Four technical and four economic criteria are used to rank debt (P1), private equity (P2), and public funds (P3) as potential alternatives for the RE technology financing. Based on experts’ judgments, the proposed framework ranked these alternatives as P1>P3>P2. When these results were compared with a SWARA-TOPSIS (Technique for Order of Preference by Similarity to Ideal Solution) method, P1 was the best model for the RE technology.