Investment in renewable energy sources represents asset funding of large-scale projects, as well as allocation financial resources for the developing more simplified programs involving solar, wind and hydro-electric power. During last 9 years, green bonds in 18 currencies of around $8.5 billion have been issued by The World Bank. To ensure the investors’ interest all the issued bonds were rated AAA/Aaa, meaning the absence of worrying about a possible default.
The World Bank’s issued green bonds are intended to the climatic projects (alleviating and adjusting), as well as ecologically safe performances, among which are:
- Renewable energy
- Effectiveness of the energy
- Efficient transportation
- Projects with a low carbon content
- Funding for watershed controlling
- Developing infrastructure defending from flooding caused by climatic factors
- Eco-friendly urban transport
- Geothermal engineering
- Improving energy efficient projects
- Sustainable forest management
- Disaster vulnerability improving
One of the best examples showing the positive growth of the attention to the environmental problems is that the first biodiversity-related and ecological sustainability ensuring the agreement was signed by EU in the association with the European Commission and the European Bank of Investments on April 11th, 2017.
The agreement, known as “Natural Capital Financing Facility”, provides up to 6€ million credit issuing for the developing 30 various programs of environment reconstruction and ensuring wildlife well-being. These programs will be implemented in the central Europe, countries of Balkan Peninsula, Sweden Lapland, and Portugal.
What is the policy of non-EU countries?
By the reason of China and the US reduced their attention to the wind and solar energy programs, green energy investments fell 17 percent in the first quarter, continuing the decline from the last year.
In spite of renewable asset funding falling the solar and wind energy now became the lowest cost electric power source due to recent drastically decreased capital costs for wind turbines and solar photovoltaics. That leads to the lower subsidization of renewal energy projects by the governments. Nevertheless, the industry’s bright events сan be rightfully considered a $1.4 billion share sale by Tesla Inc. and $650 million for an Enel SpA solar project in Mexico, which is possibly the largest plant in a way. France and Germany extended financing, whereas India and Brazil cut.
The main reason of widening reduction the investment is cheapening of capital for the green energy sector, what means that investors are able to get the same power for less money. As the BNEF said on Tuesday, the renewable energy sources produced the most electricity last year regardless of the investment falling from $348.5 billion of the previous year to $287.5 billion. Being the largest eco-energy market in the world, the China brought investment down to 11 percent ($17.2 billion) in the first quarter influenced by falling tariff subsidies and challenges with grid reduction.
US markets showed stable decreasing financing 24 percent to $9.4 billion probably caused by continued insecurity regarding tax obligations in future.