Financing Renewable Energy Projects Research Articles

Аналіз сучасних інструментів інвестування у відновлювальну енергетику України

This article examines the investment tools within the renewable energy sector in Ukraine. As the world struggles with climate change, the transition to sustainable energy sources has become a global goal. Ukraine, in its pursuit of a greener and more environmentally responsible future, has seen the growth of its renewable energy sector. However, this growth has met challenges, demand-ing the development of strategic solutions. Companies operating in the renewable energy market are now increasingly aware of their social mission in contributing to the achievement of sustainable development goals. The transformation of the energy landscape reveals the necessity of collabora-tion between various stakeholders, including governments, local authorities, banks, investment funds, and households, whose role is critical in financing renewable energy projects. As financial markets evolve and concepts of ownership adapt to the changing landscape, a need to create inno-vative investment instruments tailored to the unique demands of the renewable energy sector emerges. This enables participants in the financing process to access a wide array of investment op-tions. Among these options, "green bonds" have become a particularly effective instrument for fi-nancing renewable energy projects. The study discussed in the article highlights the numerous ad-vantages associated with “green bonds”. These advantages include legislative provisions ensuring the targeted utilization of funds raised through green bonds and their high liquidity in developed fi-nancial markets. However, for the widespread implementation of “green bonds” in financing re-newable energy projects in Ukraine, a series of legislative and organizational improvements is cru-cial. These improvements should encompass both changes in legislation and the development of the domestic financial market. Overcoming these barriers is essential for bringing Ukraine closer to the successful achievement of its sustainable development goals. This transition to sustainable ener-gy not only contributes to the global climate change mitigation but also positions Ukraine as a re-sponsible and forward-thinking player in the international effort to create a more sustainable and environmentally conscious future.

Unraveling the influence of green bonds on environmental sustainability and paving the way for sustainable energy projects in green finance.

The acceleration of renewable energy has emerged as a cornerstone strategy in mitigating climate change and advancing the sustainable stewardship of our natural resources. Nonetheless, financing renewable energy projects remains a challenging issue. In this context, green bonds have surfaced as a promising financial instrument to propel renewable energy projects forward and foster sustainable resource development. This study endeavors to evaluate the transformative impact of green bonds on renewable energy investments in China. Leveraging the fuzzy analytical hierarchy process (AHP) and the fuzzy weighted aggregates sum product assessment (WASPAS) methods, we delve into the Chinese landscape to dissect the correlation between green bonds and renewable energy investment outcomes. Through extensive literature review, we have identified several factors, comprising nuanced sub-factors, alongside distinctive investment strategies pertinent to the effective utilization of green bonds in the renewable energy sector. The fuzzy AHP analysis reveals that financial, environmental, and regulatory are the most influential factors. Employing the fuzzy WASPAS method, our findings emphasize the transformative potential of green bonds in significantly accessing to capital of renewable energy projects in the context of Chinese. This research sheds light on the pivotal role green bonds play in driving sustainable natural resource development through substantial investments in renewable energy projects.

Scaling up Renewable Energy Financing through Islamic Blended Finance: Case Study in Indonesia

This paper outlines to explore the influencing factors of unachieved target of the energy mix from renewable energy (RE) sources in Indonesia, to develop an integrated Islamic blended finance model for financing RE projects in Indonesia, and to analyse the costs and benefits of the proposed model. This research employs an exploratory sequential mixed method with the qualitative phase through in-depth interviews and Focus Group Discussions (FGD) and quantitative phases using primary and secondary data to simulate the Agent-Based Model (ABM) of the proposed model. The paper found three main financing issues on RE sector in Indonesia, including high investment costs and long payback period of RE projects, high risk perception to finance RE projects, and the uncertainty of investment return for RE developers. Besides, based on ABM simulation, Islamic blended finance can contribute to reduce the required period to achieve the energy mix target. Despite the less familiarity of Islamic finance instrument for the RE sector, an initial of a pilot project in place of the proposed business model might increase common awareness regarding this potential. Hence, policy implication delivered in this paper should be a key component to scale up RE sector via Islamic blended finance instrument.

Evaluating the impact of green bonds on renewable energy investment to promote sustainable development in China

The rapid development of renewable energy (RE) has become a crucial strategy to mitigate climate change and promote sustainable development. However, financing RE projects is often challenging due to high upfront costs, complex regulatory frameworks, and lack of access to capital. Green bonds have emerged as a promising tool for financing RE projects and promoting sustainable development. This study evaluates the impact of green bonds on RE investment in China using a fuzzy analytical hierarchy process (FAHP) and a fuzzy weighted aggregates sum product assessment (WASPAS) method. The study identifies six factors, 18 sub-factors, and six investment strategies through extensive literature works. The FAHP method is used to evaluate various factors and sub-factors, while the fuzzy weighted aggregates sum product assessment (FWASPAS) method is employed to identify the key strategies for green bonds implementation in RE projects. The FAHP analysis finds that the financial impact of green bonds is the most significant factor with financial feasibility and cost of capital being the most important sub-factors in this category. The environmental, regulatory, and market are the most important sub-factors. The FWASPAS method indicates that green bonds can have significant impact on lowering the cost of capital, improving investor confidence, and supporting project certification of RE projects.

FINANCIAL RISKS OF RENEWABLE ENERGY: CURRENT SITUATION AND IMPLICATIONS FOR DEVELOPING COUNTRIES

The study of the current state of the renewable energy sources (RES) sector as an important area for reducing harmful emissions into the atmosphere makes it possible to identify a circle of subjects – participants in the RES electricity market. The financial risks they take largely determine the present and future of this innovative market in terms of investment, financing, lending, insurance, regulation, and incentives. The renewable energy market is of particular interest to investors, financial institutions, the state setting the rules of the game and stimulating its development. The financial risks of market participants as the probability of monetary losses and losses are manifested at all stages of the development and implementation of renewable energy projects, from the development of technologies to public procurement of generated electricity. The analysis made it possible to identify the features of financing renewable energy projects, in particular, high initial financial costs, long payback periods for projects requiring long-term lending, sensitivity to regulatory and legal changes on the part of the state in terms of purchase prices for electricity, subsidies and incentive benefits for its producers and financial institutions – participants. Based on specific examples of renewable energy projects, the risks of banks, insurers in Vietnam and a number of developing countries in South Asia that provide green loans and green insurance products to companies implementing renewable energy projects, as well as households producing electricity from solar systems, are considered. Recommendations were formulated for national financial regulators, banking institutions, insurance companies to ensure acceptable financial conditions for renewable energy projects and adequately assess their own financial risks.

The asymmetric impact of public–private partnership investment in energy on CO2 emissions in Pakistan

The present study investigates the effect of public–private partnership investment in energy and renewable energy consumption on carbon dioxide (CO2) emissions, taking into account the critical role of economic growth and trade openness in Pakistan from 1992 to 2019. The linear and nonlinear autoregressive distributed lag models are employed to check the co-integration link between dependent and independent variables, further estimate short-run and long-run associations, and examine the symmetric and asymmetric effects of public–private partnership investment in energy on CO2 emissions in Pakistan. The empirical findings show that public–private partnership investment in energy reduces environmental quality by increasing CO2 emissions. Similarly, economic development and trade openness harms the atmosphere by raising CO2 emissions. On the other hand, renewable energy consumption significantly negatively affects CO2 emissions. In addition, the findings also authenticate the asymmetric link between public–private partnership investment in energy and the environment, as CO2 emissions are caused mainly by positive shocks in public–private partnership investment in energy in the short and long run. This study proposes financing renewable energy projects through public–private partnership is needed for an environmentally friendly future.

A Practical Guide to Structuring and Financing Renewable Energy Projects in Greece: The Case of Photovoltaic Plants

A Practical Guide to Structuring and Financing Renewable Energy Projects in Greece: The Case of Photovoltaic Plants

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

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.

Crowdlending for renewable energy projects: key factors to improve performance

PropósitoLa importancia del crowdfunding ha crecido considerablemente en los últimos años. Su potential como fuente de financiación ha captado la atención del mundo académico. Ante el desafío de crear un sistema energético más limpio y las considerables inversiones necesarias para alcanzar este objetivo, la literatura ha apuntado al crowdlending como una alternativa viable por sus cualidades sociales. Sin embargo, la literatura al respecto aún es escasa. Este documento tiene como objetivo contribuir a esta brecha examinando algunos de los factores críticos que determinan el desempeño de la financiación de proyectos de energía renovable a través del crowdlending.Diseño/metodología/enfoqueLos datos recopilados de la plataforma ECrowd! se estudian utilizando el análisis comparativo cualitativo de conjuntos difusos (fsQCA) como método de investigación.ResultadosLas condiciones críticas utilizadas se agrupan en tres categorías: características del préstamo, descripción del proyecto y redes sociales. Los resultados recalcan la importancia de la presencia de los fundadores en las redes sociales y de la cantidad de información proporcionada en la descripción. También sugieren que los inversores no reaccionan negativamente ante proyectos de mayores importes y plazos y que dar recompensas no tiene un impacto significativo en los resultados de las campañas.Originalidad/valorLa literatura que vincula el crowdfunding y la sostenibilidad es aún escasa, por lo que este trabajo contribuye a llenar este vacío al identificar algunos de los factores que tienen un impacto significativo en el desempeño de las campañas. Las condiciones críticas utilizadas se agrupan en tres categorías: características del préstamo, descripción del proyecto y capital social. Las conclusiones ayudan a los promotores y plataformas a saber qué acciones deben realizar para mejorar el desempeño de sus campañas.

Experience and Prospects of Financing Renewable Energy Projects in Ukraine

The study examined the experience of financing renewable energy projects in Ukraine. Renewable energy is one of the tools to enhance decarbonization and meet the obligations taken within the Association Agreement between Ukraine and the EU, and under the Paris Agreement. Ukraine has factors impeding the investments, resulting in a high cost of capital. Overall, there are five main options of financing theoretically available: lending, primarily with the aid of international financial institutions; funding of renewable energy projects by municipalities; voluntary associations of citizens; securities; irrevocable financial assistance. The future instruments include securities and a recently announced mechanism to finance renewable energy projects in the frame of the Green Deal. The most expansive spread option for funding renewable energy projects was lending with the help of international financial institutions. Due to the bilateral electricity market transition of Ukraine in 2019, Ukraine failed to found a model for sustainable financing of electricity from renewables, resulted in the accumulation of significant debt with the feed-in tariff payment. This fact hinders the planned and potential future investments until a sustainable model of financing is found.

Risk Assessment of Financing Renewable Energy Projects: A Case Study of Small Hydropower Plant Project Finance in Serbia

Risk Assessment of Financing Renewable Energy Projects: A Case Study of Small Hydropower Plant Project Finance in Serbia

Особенности развития возобновляемой энергетики в мире и в России

The purpose of the article is to study the theoretical and practical aspects of investment activities in the field of renewable energy in the world and in Russia. To achieve this goal, during the development of theoretical material, a systematic analysis of existing approaches to the assessment of financing mechanisms for renewable energy projects was carried out. Statistical and econometric research tools include correlation analysis and multivariate regression analysis. The article examines the development of renewable energy, its benefits, and investments in the industry. The financial risks and barriers associated with financing renewable energy projects are considered. The development of the industry over the past 10 years is analyzed, taking into account the impact of the COVID-19 pandemic on the electricity industry in general and on renewable energy in a number of countries. It is established that the world is shifting to the use of renewable energy sources, and in Russia they are not being given due attention. It is revealed that the existing thermal generation units in Russia are of great age and are to be decommissioned in the near future. The current state of renewable energy in Russia, measures to support it and the rate of its development are investigated. The technical potential of wind and solar power plants in the Russian Federation is considered within the aim of diversifying electricity production. The factors that negatively affect the development of the renewable energy industry are identified.

De-risking Renewable Energy Investments in Developing Countries: A Multilateral Guarantee Mechanism

Summary Mitigation of global warming requires substantial investment in electricity generation from renewable sources. A large share of new generation capacity is required in regions with adverse financing conditions. We propose a global guarantee mechanism to reduce risk premia of renewable energy investments by means of risk pooling and increased market efficiency. Policymakers could establish this mechanism by scaling up existing international risk guarantee initiatives. We estimate the net present value of overall savings at US$2018 1.5 trillion globally for investments by 2030, with the largest relative savings (between 20.5% and 22%) in Sub-Saharan Africa and the Maghreb. The savings from such a mechanism outweigh its estimated average yearly operating cost. By lowering the cost of decarbonization in high-risk countries, the proposed mechanism offers policymakers a tool to make current global mitigation pledges more achievable and enables the global community to pursue more ambitious climate action.

Problems and prospects of financing the renewable energy projects in Ukraine

Here have been defined: general problems of the domestic renewable energy sector such as inefficient use of energy resources; constant increase of prices for fuel and energy resources; unavailability of stable energy supply; delayed construction and commissioning of «alternative» power plants; complex process of obtaining of the «green» tariff in the National Commission by the power facility; seasonal construction of solar plants (before the sunny period in the spring, or before the winter period in the autumn), which requires large land plots, etc. The article refers such problems in renewable energy financing as: limited financial resources; lack of effective mechanisms for tranforming people's savings into investment; high level of investment risks; imperfect tax system; undeveloped corporate securities market. It has been proved that the prospects of financing renewable energy projects to be increased presented the primary task. The latest researches and publications in the field of renewable energy financing have been analyzed. It has been determined that both general and partial problems of financing renewable energy projects in Ukraine as well as the prospects for their further development remain unresolved. The author has investigated the problems and perspectives of financing renewable energy projects in Ukraine, as well as development of practical recommendations for the development of domestic renewable energy. The used methods: economic-statistical and abstract-logic, system approach, comparative analysis. The main directions of Ukrainian energy supply through regional projects, strategies and tactics have been highlighted. Here have been identified the most significant economic factors influencing Ukraine's energy efficiency such as state tariff policy in the field of fuel and energy resources; state fiscal policy in the field of energy saving; the policy of fuel and energy supplying organization; financial incentives for energy efficiency improvement; investment opportunities. The types of basic technologies of renewable energy in Ukraine have been generalized. The energy consumption on the basis of renewable energy sources and the total amount of energy from renewable sources in Ukraine for three years have been analyzed. The author has proposed the model of the financial-economic mechanism of state regulation of the renewable energy development in Ukraine, which would provide the state with the energy autonomy and ecological.

Green Sukuk for Financing Renewable Energy Projects

Green Sukuk for Financing Renewable Energy Projects

Financing Renewable Energy Projects in Major Emerging Market Economies: Evidence in the Perspective of Sustainable Economic Development

ABSTRACTThis research paper aims to explore the role of FDI inflows and stock market development on the promotion of renewable energy consumption. Furthermore, study investigates the effect of renewable energy consumption on CO2 emissions and economic output across a panel of Brazil, China, India, and South Africa. Study utilizes annual data from 1990 to 2012 and employs various robust panel econometric techniques. The findings confirm that both FDI inflows and stock market development play an important role in promoting renewable energy consumption. The results also reveal that renewable energy consumption helps to mitigate the growth of CO2 emissions and promotes economic development.

Financing Renewable Energy Projects in Developing Countries: A Critical Review

Access to clean and stable energy, meeting sustainable development goals, the fossil fuel dependency and depletion are some of the reasons that have impacted developing countries to transform the business as usual economy to a more sustainable economy. However, access and availability of finance is a major challenge for many developing countries. Financing renewable energy projects require access to significant resources, by multiple parties, at varying points in the project life cycles. This research aims to investigate sources and new trends in financing RE projects in developing countries. For this purpose, a detail and in-depth literature review have been conducted to explore the sources and trends of current RE financial investment and projects, to understand the gaps and limitations. This paper concludes that there are various internal and external sources of finance available for RE projects in developing countries.

Financing Renewable Energy Projects for Sustainable Economic Development in Africa

Access to clean and stable energy is a major challenge for many developing African countries. This research aims to investigate ways in which financing renewable energy projects (REPs) can help to address this problem. We find that a mix of traditional and innovative methods is used by financiers, as they see fit, in specific financing situations. In addition, we find that for investment firms, the perception of financial risks associated with financing REPs in semi-urban and rural areas is higher than that for REPs in urban areas. Furthermore, we find that for larger firms financing REPs, safety of the environment or impact on local economic development are not prioritized goals. However, for smaller localised firms, contributing to a sustainable economic development is an important consideration when financing REPs and improving the capacity of renewable energy technologies (RETs). We propose the promotion of the two-hand renewable energy service company (ESCO) model as an efficient financial vehicle for increasing sustainable economic development through the production of reliable and stable electricity in semi-urban and rural communities.

Decision-Making for Risk Management in Sustainable Renewable Energy Facilities: A Case Study in the Dominican Republic

Today, Renewable Energy Sources (RES) are a key pillar to achieving sustainable development, which is the main reason why energy projects are being carried out not only in developed countries but also in many emerging countries. Since the technical and financial risk remains a major barrier to financing renewable energy projects, several mechanisms are available to reduce risks on investment into clean energy projects. This paper discusses risk management tools in solar photovoltaic facilities based on the guide to the Project Management (PMBOK Guide). To do this, a combination of different decision-making methodologies will be carried out. These methodologies enable to not only extract the knowledge by experts but also to know the causes and effects that help to make the best decision. In order to do so, techniques to seek information (Delphi and Checklist) as well as diagram techniques such as cause and effect diagrams or Strengths Weaknesses Opportunities and Threats (SWOT) are applied. The categorization and prioritization of risks will be carried out through the Analytic Hierarchy Process (AHP). Finally, a sensitivity analysis will allow for providing consistency to the obtained results. A real case in the Dominican Republic will also be presented as case study.

Financing Renewable Energy Projects In Difficult Economic Times

ABSTRACT Successful renewable energy developers are able to obtain and retain project financing. Their projects are typically funded through a combination of equity provided by the developer and investors, as well as short- and long-term debt provided by lenders. Despite the political appeal of renewable energy projects and the popular perception that massive amounts of funding are readily available at the turn of a tap, developers face increased difficulty in the current economic environment in obtaining both equity and debt financing for projects. Equity participants, lenders, and other project participants are applying more stringent evaluations of the operations, finances, and credit of the developer. Additionally, because the cooling of the economy has slowed energy demand, utilities not subject to mandatory standards are less eager to pay a premium for green power. It is more important than ever for developers to explore every avenue of project funding to ensure a successful, viable project. This article includes a discussion of federal tax credits, grants, and other financial incentives available for renewable energy projects. In determining the scope, amount, and timing of their investment, project participants such as developers, investors, and lenders must study and become familiar with current and proposed incentives.