Project Finance and MCDM financial models: An application in renewable energy projects

Abstract

[EN] Academics, managerial and policy making community reinforce that renewable energy investments are one of the most effective instruments to attain CO2 emission reduction targets set by the Kyoto Protocol and by the recent Paris Agreement signed at the Paris climate conference (COP21) in December 2015 in which 195 countries adopted the first-ever universal, legally binding global climate deal. The problem of financing Renewable Energy (RE) projects has become a crucial issue for private and public decision makers worldwide. Budget constraints from governments and limited bank lending capacities have led to a reconsideration of the traditional financial instruments in the RE sector. The lack of credit makes impossible for commercial banks to fund RE projects with traditional loans. Research on new financing techniques for RE projects, such as Project Finance (PF) has gained interest in recent years. PF is a recent technique applied in large investments projects. During the last decades of the 20th century new public private partnership schemes enabled large infrastructure, energy and environmental projects. In these sectors PF has been used to reduce cost agency conflicts and better risk management. There is a wide number of contributions underlying the relevance of RE, however there is a lack of research on the financial aspects of RE projects. This research aims to make several contributions. First, to provide a better understanding of the PF technique and its use in the RE sector. Second, to fill the gap of research on financial aspects of RE in the literature by reviewing contributions of MCDM to RE project evaluation from the investor's perspective. Third, we propose a MPDM Moderate Pessimism Decision Making model, which adds to the rational financial evaluation of investment opportunities a set of non-financial factors that affects the investor's decisions. Finally, within the illustrative example, we apply this multi-criteria decision making process to help banks to decide if they must join a project or not.; [ES] Investigadores, comunidad empresarial y clase politica destacan que la inversion en energias renovables es uno de los instrumentos mas efectivos para alcanzar los objetivos de reduccion de CO2 establecidos por el reciente acuerdo firmado en la conferencia de Paris (COP21) en diciembre de 2015, en el cual, 195 paises adoptaron el primer acuerdo universal y juridicamente vinculante de la historia. El problema de la financiacion de los proyectos de energia renovable (RE) es un tema crucial para cualquier decisor publico o privado. Las limitaciones presupuestarias de los gobiernos y la falta de credito han provocado que se reconsideren los instrumentos de financiacion en el sector de las RE, por lo tanto, la investigacion en nuevas tecnicas de financiamiento para los proyectos de RE, como Project Finance (PF) ha ganado interes en los ultimos anos. PF es una tecnica que se aplica en grandes proyectos de inversion. A finales del Siglo XX, los nuevos esquemas de colaboracion publico-privadas han…