Stocktaking study on financial instruments by sector

Short description: 
FI Compass ERDF published a stocktaking study on financial instruments by sector analysing the use of financial instruments in the renewable energy sector
Description: 

Fi compass ERDF published a stocktaking study on financial instruments by sector analysing the use of financial instruments in the renewable energy sector.

To achieve its goal of 32% share of renewable energy in final energy consumption by 2030, the EU has to step up investments in the renewables sector. In the Clean Energy for All European Package, the European Commission points out the need of additional annual investment to the current trend of 9 billion from private and public sources from 2021 to 2030. EUR  63  billion investment in RES are needed to achieve the 2030 targets for 2021-2027.

What will ESIF fund in the sector?

In order to raise the necessary financing, financial instruments are needed to make the investments bankable, ESIF financial instruments can play an important role in raising private and public sector investments filling the gap between current deployment and the EU targets for RES. They can attract private financers by their leverage effect. Thanks to their leverage effect, they can attract private financers.

The European Structural and Investment Funds (ESIF) already showed interest in the sector of renewables and should step up. Almost EUR 6 billion of ERDF/CF investments has been planned to support Renewable Energy investments during the 2014-2020 programming period across the EU.  

ERDF and Cohesion Fund plan to focus on biomass energy (30% - 1.8 billion euros) and other RES such as hydroelectric and geothermal (23% - 1.373 billion euros), solar energy (20% 1.2 billion euros) and wind energy (7% - 431 million euros). Poland, Hungary and Spain account for 43.8% of the ERDF/CF expenditure planned in the sector.

Barriers to RES financing in Europe exist on both demand and supply-sides: competition with grants/subsidies, complex state aid rules, fragmentation of ERDF/CF resources, eligibility criteria, cumulation of State aid.

Still, these instruments are highly valuable and have high potential impact. In this context, Fi Compass ERDF present in its study the key enabling factors for the use of financial instruments, namely:

  • Transferring knowledge on financial instruments in the sub-sector
  • Integrating RES financing into financial instruments for SMEs
  • Combining grants with financial instruments
  • Designing financial instrument-friendly operational programmes
  • Providing technical assistance
Year: 
2021
Topics: 
Financing
Renewable