Banks in Europe claim they are comfortable with lending to renewable energy projects financed on the back of corporate power purchase agreements, but only if the purchaser is a large entity or utility. Bank loans longer than five to ten years may be hard to come by
Explainer: Long-term loans on decent terms are essential for driving down the cost of renewable energy projects, also if the project’s electricity is sold directly to a user through a power purchase agreement (PPA)
The problem: PPAs for renewable energy projects are relatively new in Europe and banks can be cautious about making loans to projects based on them, especially if they lack trust in the purchaser because it is not a utility or very large company
Solutions: Varied, but may push up costs and the price of renewable energy
Key quote: “I don't sense a reluctance towards corporate PPAs from us or our peer group. Broadly everyone is on board.” ...
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