Renewable energy financing by state investment banks: Evidence from OECD countries
Open access
Date
2024-04Type
- Journal Article
Abstract
While governments increasingly employ state investment banks (SIBs) to finance renewable energy projects, whether these institutions’ actual behavior aligns with expectations remains uncertain. Here, we assess the predictors of SIB involvement in renewable energy deals in OECD countries using a fixed-effects logit model. Our results show greater SIB involvement in higher-risk technologies such as offshore wind and biomass but decreased activity once domestic markets for solar photovoltaics mature. Contrary to what the literature suggests, however, SIBs show no increased involvement in first projects using novel technology, unlike other public-sector lenders, and less involvement in smaller renewable energy deals. The evidence on whether SIBs mobilize private sector lenders or crowd them out favors the former but remains equivocal. We conclude by discussing the implications for policymakers regarding the mandates and guidelines for SIBs. Show more
Permanent link
https://doi.org/10.3929/ethz-b-000666196Publication status
publishedExternal links
Journal / series
Energy EconomicsVolume
Pages / Article No.
Publisher
ElsevierSubject
Clean energy; Derisking; Public finance; Energy policy; Power generationFunding
948220 - Effective green financial policies for the low-carbon transition (EC)
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