Category: Finance

Sustainable Finance: Indian government concludes sovereign green bond sale of Rs 160 billion

Sustainable Finance: Indian government concludes sovereign green bond sale of Rs 160 billion

March 24, 2023 |

In February 2023, the Indian government concluded the sale of Rs 160 billion in SGBs. The first tranche was released in January 2023, raising a total of Rs 80 billion. Of this, Rs 40 billion was raised for a five-year tenor (2028) at a yield of 7.1 per cent. The remaining Rs 40 billion was issued for a 10-year tenor (2033) at a yield of 7.29 per cent. The second tranche of SGBs was released in February 2023, also for Rs 80 billion, divided into two tranches of Rs 40 billion each.

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Financing the Transition: Energy Supply Investment and Bank Financing Activity

Financing the Transition: Energy Supply Investment and Bank Financing Activity

March 5, 2023 |

In 2021, banks financed 81% as much low-carbon energy supply as fossil fuels – for every dollar of bank financing activity supporting fossil-fuel supply, 0.8 supported low-carbon energy. While financing is a different metric to capital invested, this ratio broadly reflected real-economy investment activity at 0.9:1. For every dollar invested in fossil fuel supply in 2030 this should be matched with four times as much being invested in low-carbon energy supply.

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<strong>Financing Hydrogen Export Projects</strong>

Financing Hydrogen Export Projects

February 12, 2023 |

This paper, for illustration, examines an Archetype project, using 1GW of solar generation to produce 250 ktpa green ammonia be sold at a fixed price of USD 770/tonne (just sufficient to meet the assumed cost of capital). This compares with a 5-year average price of a little over USD 600/tonne but over USD 1,300/tonne. Assuming a 20-year offtake contract and a 15-year loan (with a 3- 27 year construction period), the Archetype project can support a DER of around 65 per cent.

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Solar economics: The PTC vs. ITC decision

Solar economics: The PTC vs. ITC decision

January 8, 2023 |

Under the Inflation Reduction Act (IRA) signed into law in 2022, solar projects may now opt for either an investment tax credit (ITC) or a production tax credit (PTC). What’s at stake for solar developers across the country is making a choice between an upfront investment-based incentive versus a production-based incentive applicable for the project’s first ten years of operations. This decision of whether to opt for PTC or ITC is a balancing act that depends on three primary considerations: expected capacity factor, investment (capital and financing) costs, and bonus eligibility.  

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Is RE capacity in the EU making windfall profits from high wholesale prices?

Is RE capacity in the EU making windfall profits from high wholesale prices?

December 22, 2022 |

High fossil fuel prices have resulted in windfall profits for some energy companies. In fact, the profits of major oil, gas, coal and refinery companies in the first half of 2022 more than doubled from the same period last year, and discussion on windfall profits in the European Union has extended to electricity generators (including renewables-based ones) that can produce electricity at lower marginal costs than natural gas-fuelled power plants. 

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Exploring Agrivoltaics: Benefits and cost economics of APV plants

Exploring Agrivoltaics: Benefits and cost economics of APV plants

December 7, 2022 |

APV plants have several benefits. One, there is dual use of land. There is common civil infrastructure such as fencing, lighting, land grading and storage. Two, there is a high yield of organic horticulture or floriculture due to contro­lled shading. Three, higher PV generation from bifacial panels is possible due to the elevated installation and higher albedo of the shade net/soil/ crop system. In addition, there is a benefit of possibly lowering panel temperatures due to crop evapotranspiration.

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The Rise of Climate Fintech

The Rise of Climate Fintech

November 18, 2022 |

The climate crisis is a defining challenge for Asia and the Pacific, which as a region is the most vulnerable to global warming, and a significant contributor to its cause. Yet, it is not all doom and gloom. Driven by a combination of climate change, finance, and digital technology —collectively known as ‘climate fintech’ — the financial services industry is preparing to address these challenges and capture opportunities for transitioning to a more sustainable economy. 

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USD 236 billion of green bonds added in H1: Climate Bonds Initiative

USD 236 billion of green bonds added in H1: Climate Bonds Initiative

October 26, 2022 |

During H1, green bonds amounting to USD236 billion were added to the Climate Bonds GBDB as Q2 issuance (USD133 billion) picked up slightly compared to Q1 (USD103 billion). May was the busiest month (USD50 million) helped by several large deals from Austria, which priced its first sovereign green bond, a 2049 maturity (EUR4 billon/USD4.2 billion), TenneT (a four tranche deal worth EUR3.85 billion/ USD4.1 billion), and EIB (EUR4 billion/USD4.3 billion).

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How clean energy economics can benefit from the biggest climate law in US history

How clean energy economics can benefit from the biggest climate law in US history

October 5, 2022 |

For mature technologies, such as wind and solar, these incentives have the potential to supercharge an already-rapid pace of development. In our analysis, we estimate that the solar and wind LCOEs in 2030 with the IRA will be lower than those without it by 20%-35% and 38%-49%, respectively. However, despite the economic incentives, the IRA may encounter other development challenges facing renewable energy projects.

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India’s renewable energy sector experiences a wave of M&A activity

India’s renewable energy sector experiences a wave of M&A activity

October 1, 2022 |

Interestingly, mergers and acquisitions (M&A) continue to dominate India’s rene­wable energy financing, as is the case in many other large markets worldwide. In 2021-22, acquisitions contributed to more than 40 per cent of the total major renewable energy investments in the country. The M&A surge looks likely to continue in 2022-23 as well, with a few big acquisitions already announced and at advanced stages of completion. This article takes a deep dive into some of these acquisitions and assesses the growing renewable en­ergy M&A landscape.

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Delivering the low-carbon transition in emerging markets and developing economies

Delivering the low-carbon transition in emerging markets and developing economies

September 27, 2022 |

A review of the impact and achievements of some trailblazing governments, corporates, investors, and civil society across EM&DEs over the last decade also reveals the opportunities that transitioning to a low-carbon economy can generate. In this piece, the authors provide Macquarie’s perspective on why supporting decarbonisation in EM&DEs is central to global climate change mitigation efforts.

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Cost of Ownership of Fuel-Cell Hydrogen Trucks in Europe

Cost of Ownership of Fuel-Cell Hydrogen Trucks in Europe

September 24, 2022 |

This study evaluates the total cost of ownership (TCO) of fuel cell electric trucks (FCETs), focusing on long-haul tractor-trailers, the highest-emitting HDV segment in the EU. The geographic scope of this study includes seven European countries—France, the United Kingdom, Germany, Italy, Spain, the Netherlands, and Poland—representing more than 75% of HDV registrations in the EU in 2020.

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Transition Finance is Critical to Address Climate Change

Transition Finance is Critical to Address Climate Change

September 7, 2022 |

Asia and the Pacific should consider launching its own transition funds. Transition funds can be launched by either governments or international organizations, such as multilateral development banks and other international financial institutions, or through international collaboration among different countries to reduce the funding costs and risks for these transactions, and help attract private sector investment.

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US Climate Law Ushers in New National Green Bank

US Climate Law Ushers in New National Green Bank

August 28, 2022 |

The passage of the Inflation Reduction Act (IRA) is a long-overdue step toward establishing a national green bank that will unleash tens of billions of public and private dollars for investment in clean energy and climate-resilient infrastructure in underserved communities. In addition to supporting economic development, these investments will reduce air pollution and improve the health and safety of communities.

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Indonesia Green Taxonomy 1.0: Yellow Does Not Mean Go

Indonesia Green Taxonomy 1.0: Yellow Does Not Mean Go

August 17, 2022 |

A green taxonomy is a list that classifies all business activities based on their contribution to environmental aims and thresholds. Launched in January 2022, Indonesia’s Green Taxonomy 1.0 has been designed mainly as a guidance, rather than a mandatory instrument. This, however, may expand in the future, for example, through mandatory disclosures of taxonomy-relevant investment portfolios.

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TransLink 2022 Investment Plan: Commitment to net-zero emissions

TransLink 2022 Investment Plan: Commitment to net-zero emissions

August 8, 2022 |

In May 2022, the Mayors’ Council on Regional Transportation and TransLink’s Board of Directors approved the agency’s 2022 Investment Plan, followed by a commitment by the Government of British Columbia of CAD2.4 billion to support transit investments. The 2022 Investment Plan will help advance the objectives of Transport 2050, Metro 2050, and Climate 2050.

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China’s new green finance guidelines have a deforestation blind spot

China’s new green finance guidelines have a deforestation blind spot

August 3, 2022 |

On 1 June, the China Banking and Insurance Regulatory Commission (CBIRC) issued a new set of green guidelines. These lay out detailed expectations for banks and insurance companies to identify, monitor, prevent and control their environmental, social and governance (ESG) risks. Policymakers in China have been showing a growing interest in green finance. Traditionally, policies in the area have mainly focused on encouraging financial flows into supporting green, non-polluting and low-carbon businesses.

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Cost declines in 2021 may not be repeated for solar PV and wind power in 2022: IRENA 

Cost declines in 2021 may not be repeated for solar PV and wind power in 2022: IRENA 

July 22, 2022 |

The cost declines seen in 2021 may not be repeated for solar PV and wind power in 2022, as supply chain constraints have been having an impact since late 2020, while commodity price rises accelerated in late 2021. These two factors saw equipment prices increase after experiencing lows in the first half of 2020, when the pandemic first took hold. Yet, the impact of these factors on projects commissioned in 2021 was not enough to raise the full year weighted average LCOE in many individual markets, nor at a global level.

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Climate Finance Needs in Africa

Climate Finance Needs in Africa

July 19, 2022 |

The total cost of implementing NDCs in Africa is estimated at USD 2.8 trillion over 2020- 2030. This includes the estimation of loss and damage when provided by countries. Of this, national governments have committed to providing USD 264 billion (about 10%), with the remaining USD 2.5 trillion identified as climate finance needs. Across all African regions, reported needs greatly exceed country allocations from national government budgets.

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More is More: Potential boost to Asian renewable energy from the Indo-Pacific Economic Framework

More is More: Potential boost to Asian renewable energy from the Indo-Pacific Economic Framework

July 14, 2022 |

If the Indo-Pacific Economic Framework (IPEF) becomes a binding agreement that delivers on its ambitions, many Asia Pacific economies could receive a boost to their clean energy needs. The US-led IPEF can complement the China-led Regional Comprehensive Economic Partnership (RCEP). Together, they would cover countries which need a combined annual spend of about USD1.27T to hit the 1.5°C climate goal.

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