Unlocking Renewable Energy Investment: The role of risk mitigation and structured finance

As this June 2016 report from IRENA explains, global investment in renewables has remained far below its potential, and the investment shortfall reflects enduring market barriers and perceptions of high risk that deters private investors and financiers. This report identifies the main risks and barriers limiting investment, and discusses key risk mitigation tools to increase private investments. IRENA explains the role of structured finance and risk mitigants as a way to systematically lower risk and draw in more private capital at attractive rates. Three case studies are provided, including an overview of The UK-Green Investment Bank’s offshore wind fund and how it works with a consortium of non-traditional private investors on long-term debt investments, allowing the developer to significantly reduce its balance sheet burden after construction and put capital back into new rounds of project development.