Mobilising low-cost institutional investment in renewable energy

A sustainable reduction in the cost of capital for renewable energy projects will take a multi-pronged approach, which could herald a range of broader changes to institutional investor/asset manager relations across a range of timescales. The most effective catalyst will depend on the market. In many developing markets, the key to reducing costs of capital may involve instruments, such as cheap currency hedging facilities, which open up access to cheaper non-domestic capital or may simply involve improving the transparency of a given renewable energy regulatory framework. These solutions are less relevant in the more stable regulatory (if not political) environments in the large developed markets that this study has been focused on (the USA, the UK and the Eurozone). The depth, liquidity and sophistication of capital markets in these areas make these potentially powerful agents for change.