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Sustainable Solutions for Green Financing and Investment in Renewable Energy Projects

Author

Listed:
  • Farhad Taghizadeh-Hesary

    (Tokai University, Hiratsuka, Kanagawa 259-1292, Japan)

  • Naoyuki Yoshino

    (Asian Development Bank Institute, Chiyoda-ku, Tokyo 100-6008, Japan
    Faculty of Economics, Keio University, Minato-ku, Tokyo 108-8345, Japan)

Abstract

The lack of long-term financing, the low rate of return, the existence of various risks, and the lack of capacity of market players are major challenges for the development of green energy projects. This paper aimed to highlight the challenges of green financing and investment in renewable energy projects and to provide practical solutions for filling the green financing gap. Practical solutions include increasing the role of public financial institutions and non-banking financial institutions (pension funds and insurance companies) in long-term green investments, utilizing the spillover tax to increase the rate of return of green projects, developing green credit guarantee schemes to reduce the credit risk, establishing community-based trust funds, and addressing green investment risks via financial and policy de-risking. The paper also provides a practical example of the implementation of the proposed tools.

Suggested Citation

  • Farhad Taghizadeh-Hesary & Naoyuki Yoshino, 2020. "Sustainable Solutions for Green Financing and Investment in Renewable Energy Projects," Energies, MDPI, vol. 13(4), pages 1-18, February.
    • Handle: RePEc:gam:jeners:v:13:y:2020:i:4:p:788-:d:319176
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    References listed on IDEAS

    as
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