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Green finance: overcoming capital cost barriers to low-carbon energy projects through public-private partnerships

Organizer: Graham Ashford
Format: Onsite-Online, Afternoon

Abstract:
Overview: This session will describe how innovative public-private sector finance arrangements can overcome upfront capital cost barriers to renewable energy projects in large institution applications. The presenters will use an award winning $10 million low-carbon infrastructure partnership between the University of the Sunshine Coast and Veolia as a case study to describe the more general characteristics of institution-level low carbon infrastructure projects that are favourable to private sector investment and the steps required to identify, assess, negotiate, and implement them. Background: Many large institutions that are committed to reducing energy use and emissions face considerable practical barriers to commencing projects due to a lack of access to capital to cover the upfront construction costs. This is true even where over the lifecycle of the project the costs avoided, for example through energy savings, would be greater than the initial capital outlay. These finance barriers are significant because they constrain implementation of carbon mitigation activities that are among the most financially favourable of those available to institutions with large facilities such as universities, hospitals, etc. As the USC/Veolia partnership demonstrates, a subset of these infrastructure projects is likely to offer a sufficient return on investment that private sector entities will finance their construction and operation in return for a stream of payments after which the infrastructure will be owned by the host institution. In the case study example, USC expects to avoid roughly $100 million in energy costs over the twenty five-year project while reducing its emissions by 40 percent (over 100 000 tonnes CO2). Session structure: The interactive session will explain the characteristics of institution-level low carbon infrastructure projects that are favourable to private sector investment and use the USC/Veolia project to describe in detail the steps that were taken to identify, assess, finance, and implement it.

Themes: Knowledge-to-Action