Creativity in the renewable energy sector is not limited to new technologies. New energy finance interventions are also emerging. Some are quite relevant and are designed to have a practical impact on improving human quality of life.
“The idea of FiRe arose as a response to the UN Secretary General’s challenge at last year’s Summit: for the private sector to step up to the mark and do more to fund clean energy. It’s been amazing to see FiRe coming together. We started with 35 ideas; then there were 26 candidates; then 12 finalists; and now six fantastic winners. These are really powerful ideas for generating new investment opportunities in clean energy,” said Michael Liebreich, chairman of FiRe and of the advisory board of Bloomberg New Energy Finance.
The 6 Winners:
- Four types of green bonds to be mainstreamed – Bank of America Merrill Lynch
- A debt fund for pre-paid energy access for people in developing countries – Simon Bransfield-Garth of Azuri Technologies. Five million households could benefit.
- Creating an energy center to help businesses with renewables – Rocky Mountain Institute
- Quickening energy efficiency financing in China, Brazil and India – Josué Tanaka of the European Bank for Reconstruction
- Developing monoline guarantees for green bonds – David Stevens of AMF Guarantee
- Improving Designing GEEREF 2.0. – Cyrille Arnould of the European Investment Bank.
Nowhere is it written that human society must continue fossil fuels forever, even if that was possible. The term ‘grid defection’ comes up once in a while to reference what might happen when renewable, clean energy penetrates various national societies. However, one may simply see this kind of societal movement as progress, rather than anything troubling.
The same can be said of conventional and traditional methods of financing new energy projects. None of us are permanently married to conventional loans carried by a rigid banking and financial system that yielded and promoted mortgage-backed securities and allowed the related abuses.
A new, disruptive creative financing approach can be seen in micro-lending, such as the practices employed by the Grameen Bank in India. Kiva also has helped many people rise out of poverty. Who knows exactly what the results will be for creative energy financing projects, but some of them may yield great benefits.
“The intervention for a global network of energy efficiency financing banks was spurred by the call for proposals by the FiRe team led by the inspiring Michael Liebreich. The concept would not have been developed without the BNEF FiRe catalyst. True leadership tightly managed for results,” said one of the winners, Josue Tanaka. Two million dollars had already been raised for the energy efficiency financing banks network Tanaka mentioned.
We often hear about some technical specifications related to solar or wind power projects and those are undoubtedly important. Creative financing for such projects we tend to hear less about, though the financial details are just as important.
If financing becomes more flexible and creative in order to provide fiscal solutions, renewable energy might undergo a more rapid, and smoother transition. Finance is a standard course for business students, but are they also learning about sustainable energy finance? It is exactly young adults that are frequently the most charged to try to improve society or ‘save the world’ as it is sometimes phrased. So, events like the BNEF summit that provide creative energy finance examples and related press could inspire a ripple effect.