The Paris UN Climate Agreement in 2015 refocused attention on the need to mobilize substantial private capital flows into climate solutions at the accelerated pace and at the required scale to combat climate change.
Implementation of national clean energy or ‘green’ infrastructure plans will require unprecedented levels of private investment, not only for climate reasons but also to deliver energy security and access to energy for those who lack them, as well as creating the conditions for sustainable development.
As a practical contribution, this guide provides a factual overview of the landscape of finance – sources of capital, what the capital markets do, how transactions work – and more broadly to set common finance terms in context.
Topics covered include:
- how finance generally works, with updated finance variables
- what the different parts of the finance sector do
- what issues financiers consider when investing, including the role of policy and regulation
- capital markets and where, for example, ‘green bonds’ fit in
- the variables affecting finance decisions
- energy efficiency – an expanded section, and an update on issues relating to emerging or developing-country markets
- a practical focus on ‘climate finance’, especially finance-sector-led initiatives that are accelerating actions at both the low- and high-carbon end of the spectrum
The starting point is an explanation of the financial institutions – what they do and how they make decisions – concentrating on those relevant to the more mature end of the renewable energy infrastructure market, using proven technologies that are being financed now and at scale.