Project Finance for Renewables
Accordingly, project finance has historically been somewhat problematic for renewable energy interests to procure. Financiers central to structuring the deal were either unfamiliar or uncomfortable with the risks posed by renewable energy technologies, most of which have not been in commercial operation for decades. This lack of project finance capacity has thus been a major barrier to the widespread deployment of otherwise viable renewable energy technologies in commercial-scale projects.
The good news is that project finance capacity is increasingly opening its doors to renewable energy opportunities. Financial professionals with deep knowledge of the true abilities of renewable energy are finally beginning to amass capital to deploy in sponsoring the development of renewable energy projects. The recent announcement of the $80 million bankroll behind US Renewables Group is but one indicator of the growth in this pivotal capacity for the future growth of renewables.
Other boutique project financiers specializing in renewable energy opportunities are also emerging, and others will continue to form to capitalize on the rapid growth potential virtually uniquely offered by the renewable energy sector. We will know that renewable technologies and projects are truly mainstream when the big banks like Citi and JPMorgan lead the honor rolls of renewable energy project financiers. With the purchase of Zilkha Renewable Energy by Goldman Sachs earlier this year providing an immense boost to the credibility of renewables on Wall Street, these days cannot be long from now.
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