Financing Mechanisms

The sources, availability and terms of financing are important considerations in investing. This information provides a good indication of the perceived risk of each project. Specific factors to consider include: (a) the presence of special funds or dedicated lines of credit for EE efficiency; (b) the existence of venture capital funds for the target country (c) in-country financing terms and rates and (d) the ability of national banks to provide project finance loans.

The form of financing energy efficiency depends on evaluating a variety of factors, such as available cash, risk, time to arrange and organize the project, long-term profitability, leasing instead of buying and government guarantees. There are about six major forms of making energy efficiency investments: (a) direct investment; (b) local bank loans; (c) obligations and revenue bonds; (d) performance contracting—equipment and service contracts; (e) through third party financing—ESCOs and (f) in-country funds based on loans or grants from multilateral or bilateral agencies.19

Renewable Energy 101

Renewable Energy 101

Renewable energy is energy that is generated from sunlight, rain, tides, geothermal heat and wind. These sources are naturally and constantly replenished, which is why they are deemed as renewable. The usage of renewable energy sources is very important when considering the sustainability of the existing energy usage of the world. While there is currently an abundance of non-renewable energy sources, such as nuclear fuels, these energy sources are depleting. In addition to being a non-renewable supply, the non-renewable energy sources release emissions into the air, which has an adverse effect on the environment.

Get My Free Ebook


Post a comment