14 Jul 2020
The following statement is from Mona Dajani, Partner at Pillsbury Winthrop Shaw Pittman LLP and ACORE Board Member, regarding ACORE's latest analysis on their campaign to reach $1 trillion by 2030 in private sector investment in renewable energy and enabling grid technologies. Mona is co-leader of Pillsbury's Energy and Infrastructure Projects Team and also leads the Renewable Energy practice. This also relates to Joe Biden's expected call for setting a 100% clean-electricity standard by 2035, and investing $2 trillion over four years on clean energy:
"We're structuring and negotiating deals right now that will make renewable energy a bright spot in the recovery. As ACORE's 1T report today says, the drivers include more demand from corporate buyers, and private sector investment in renewable energy and enabling grid technologies. They want 'in' on the tremendous growth in carbon-free energy that is still ahead of us, especially now that pricing has dramatically decreased.
"Last year, three-fourths of the corporate Power Purchase Agreements for renewable energy projects were located in the U.S. That is starting to shift as European corporate companies take a greater interest in direct purchasing of renewable energy too.
"Renewable energy-focused infrastructure funds raised over $20 billion last year, four times the year before. That will accelerate with wider use of sustainability-linked debt products such as "Green Loans/Bonds" and "Sustainability-Linked Loans/Bonds," which are linked to borrowers' performance on environmental, social and governance (ESG) issues. Pioneered in Europe, but set also for growth in the U.S. and Asia, such loans offer borrowers discounted rates if they meet ESG targets. This is in contrast to green loans, the proceeds of which must be used for green projects such as renewable energy, waste reduction or clean transportation.
"2019 was a record year for sustainable finance, with more sustainable debt issued globally than ever before. According to Bloomberg data, the total raised was $465 billion globally, up 78% from $261.4 billion in 2018."
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