Financing for Sustainable Development

Financing for Sustainable Development Trade Credebt
The Credebt® team have worked with a group of companies developing solar and wind energy projects and providing renewable power generation in South Asia. These companies play a vital role in the transformation of renewable energy in underserved markets like Asia where they manage the origination, development, ownership and operation of clean energy projects.

This group are committed to a socially responsible and sustainable future by developing, building, and operating affordable, efficient and innovative clean energy infrastructures. This sustainable solutions group is also working with local communities to supply clean inexpensive and reliable electricity as well as employment opportunities, access to education and they also work to support food security.

Their services include solar, hybrid, renewables integration, smart grid, microgrid, renewable energy, smart energy, solar energy, energy storage, wind energy, floating solar, gravity storage, pumped hydro and battery storage. A recent project involved Solar PV installations with a tracker system to maximise the capture of solar radiation on panels. It is expected to offset over 160,000 tons of carbon dioxide annually. The sites chosen for this project has a heavy demand for energy along with high radiation levels making it an excellent opportunity for a Solar PV project.

Along with their partners, this group is also committed to bringing clean, renewable energy to Nepal. Although Nepal produces a large amount of hydropower it is still vulnerable to power outages and energy price fluctuations. There is an electricity supply gap of between 500MW to 700MW during peak hours in the dry season and this represents an opportunity for independent clean power developers. To meet expenses in the final stages of development the group reached out to their bank for an additional credit facility. Their bank requested the provision of security via an SBL/C. A Standby Letter of Credit is an essential tool in successful finance. Sometimes known as a ‘documentary credit’, ‘commercial letter of credit’, ‘LC’, or ‘bank guarantee’. Such facilities provide a payment commitment to the seller for an amount against the presentation of documents which comply exactly with the terms and conditions of the credit and applicable rules. At Credebt® we provide Letters of Credit [L/C] and Standby Letter of Credit [SBL/C] for transactions valued at EUR 50.0k and upwards.

Renewable power capacity is expected to grow globally to 7,300 GW between 2023 and 2028. Solar Photovoltaics [PV] and Wind Energy will account for 95.00% of the expansion overtaking coal to become the largest source of global electricity generation by early 2025. According to a recent report published by the IEA, renewable power generation added 50.00% more capacity in 2023 and is expected to see rapid growth over the next 5 years. However, financing in emerging economies continues to be an issue. Governments can play a significant role in encouraging private investment which can lead to better returns for infrastructure development. Demand for renewable energy is driving innovation in the region and dedicated Non-Bank Finance Companies [NBFC] already exist and can assist countries in South Asia along their path to sustainable energy.

To power the future, more financing organisations will be needed to provide the financial instruments required to bring clean energy to these underserved markets.

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