Project financing plays an increasingly important role in meeting the increasing demand for green and sustainable energy infrastructure.
With a country race to build clean and more elastic energy systems, investment rises – however, turns on how to finance project. According to the IEA Global Investment Report (IEA), Energy Investment exceeded $ 3 trillion for the first time last year, with project financing appeared as an important financing model.
On the global level, Project Finance plays a pivotal role in enabling energy infrastructure development, especially in areas where public capital is limited. This is especially true for renewable energy initiatives and capital density in developing countries, where organized financing mechanisms mobilize private investment.
In addition, investment banks, along with private credit and stocks, are still major supporters to invest in fossil fuels. But the long -term path indicates an increasing preference for clean energy, driven by policy incentives and advanced investor priorities. Of the 3 trillion dollars of global energy investments in 2024, about $ 2 trillion was allocated to clean energy technologies-including renewable energy, networks, nuclear fuel and low species, and the presence of slightly more than a trillion dollars of fossil fuel, including charcoal, oil and gas, IEA reports.
To put these numbers in its correct perspective, the percentage of clean energy turned to investment in fossil fuels from 2: 1 in 2015 to 10: 1 in 2024 to generate power specifically. According to the latest data available, the total investment in solar PVs (PV) is expected to be $ 500 billion for 2024, exceeding all other electricity generation technologies combined.
China is leading the road to spending clean energy with $ 680 billion, followed by the European Union ($ 370 billion) and the United States ($ 300 billion). Oversea-Chinese Banking Corporation (OCBC), which is based in Singapore, is among the main banks that support customers in the field of energy infrastructure, cooperation with Chinese sponsors, engineering, purchases and construction (EPC) to develop and create renewable projects in Southeast Asia: via generation, via, and distribution, distribution, distribution And replacement in storage.
“After adhering to the achievement of net zero emissions by 2050 for a period of six priority sectors, including the energy, oil and gas sector,” says the OCBC International Funding Team, “It was the main focus in favor of the bank on increasing new energy efficiency and promoting it in the field of new activities and renewing it in developing new energy and renewing it in the field of energy and necessary. Infrastructure.”
For example, OCBC China has extended a 220 million yen green loan (about 30 million dollars) for Jiangsu Financial Leasing. The loan is used for renewable energy generation projects in regions including Hebei, Guangxi and Jiangsu.
“Markets like Chile and Colombia have appeared as prominent opportunities.”
Hugo AssunçãoFinancial Director, Pervin below
These projects aim to conserve energy and reduce emissions and pollution, and it is expected to improve the quality of territorial waters and improve energy infrastructure.
“The green loan enables Jiangsu Financial enaring to integrate environmental considerations into their commercial activities, putting the company on the right track to meet sustainability obligations,” says OCBC.
Outside China, OCBC supports energy projects in Australia, Southeast Asia and North Asia, as well as the United Kingdom and the United States. The common denominators include clear paths of energy security, not only within the area of renewable energy sources but also for liquid natural gas as a transitional fuel. The bank recently adhered to financing two projects in the United Kingdom, including a large carbon capture storage facility commercially and a gas power plant with carbon capture. “Our participation in financing long -distance transportation lines in the UK also puts us in a positive position to contribute to the development of the ASEAN power network, which is currently thinking,” says OCBC.
Risks of reducing
While China has made progress through an investment in the infrastructure of the massive infrastructure, the risk of clearance – where renewed power generation can be deliberately reduced or stopped due to network restrictions, increased accreditation, or market efficiency – in interest in certain areas. This is particularly the case in winds rich in wind, as transmission restrictions reduce evaluation rates that sometimes exceed 20 %.
Elsewhere, the risk of reducing tends to be pronounced in the world regions that suffer from rapid growth of renewable energy but lacks sufficient infrastructure for sending.
Brazil is one of that. Fitch classifications predict that the volume of the inverted energy there may rise over the next few years due to the level of the renewable generation intermittent in the country’s energy mix and the time required to build new transport lines.
Brazil works to treat this. The country’s total infrastructure investment in the country amounted to $ 259 billion (about $ 46 billion) in 2024, an increase of 15 % over the previous year, with the allocation of about 46 % for energy projects, according to Associação Brasileira Da Infrastruraa E Indústiras de Base.
“The energy market in Brazil has shown steadfast growth, supported by strong organizational supervision,” says Hogo Assunção, the SOO Paulo -based Perfin Infra. “However, it faces structural challenges, especially reducing … for the major demand centers in the southeast. To alleviate this, investments have increasingly focused on expanding the transmission infrastructure.” Perfin Infra’s infrastructure assets increased in 2024 from 9 billion dollars to $ 15 billion in 2024, mainly driven by strategic investments through sectors of transmission, obstetrics, highways and sanitation.
All over Latin America as a whole, the deployment of capital led by Brazilian investors has grown steadily, says Assunção, partially supports favorable organizational frameworks.
He added, “Recently, markets such as Chile and Colombia have appeared as prominent opportunities,” especially in the renewable energy sectors and sustainable infrastructure. “
Despite the difficult macroeconomic environment, Assunção is attributed to Brazil with a strong momentum in the appetite of capital markets for well -designed infrastructure projects. “The stable organizational framework in Brazil and the accelerated demand for clean energy has strengthened the confidence of investors,” he says.
Organizational certainty remains a major factor in pushing the investment of renewable energy sources forward, as well as supporting policy and simplified permits. These concerns have only gained importance because the recent procedures for the Trump administration indicate that the uncertainty is not limited to emerging markets.
Maria Hook, Energy Organization and Market partner at Keelford Chance says that policies that hinder the winds and other renewable projects, which would have contributed to the great megawat ability of the system during the next decade, will create great challenges to spread the new generation throughout the United States. She says that countries that maintain fixed investments in renewable energy sources without implementing the insults are likely to gain a competitive advantage.
“We don’t really see any other countries that take specific measures against certain types of renewable projects,” says Hook.
Private sector financing
It is very important for private sector investors trying to measure their appetite risks organizational frameworks that include protection of lenders and guaranteeing mortgage rights, while private stock investors closely reside how regulations affect the opportunities for exit and asset assessment.
This means that private capital focuses on judicial authorities with transparent and expected organizational environments and technologies with the strongest organizational support.
Assunção from Perfin’s Assunção, private non -liquid boxes “are increasingly displaced on traditional banks as a major source of financing, and engaging from the early stages of project development, including the construction phase.”
Perfin expects that the tendency towards private capital to finance green and sustainable energy projects will continue until the end of this year, as projects are compatible with energy and emerging technologies – such as green hydrogen storage and energy storage – to attract important investor interest.
“These sectors attract the growing capital flows,” says Assunção, driven by their strategic importance and growing global demand for sustainable solutions. “
