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Raiffeisen Bank International

Austria/Brazil: Mechanism to Guarantee Energy Supply Contracts

Submitted by Baerbel Epp on July 13, 2013

Energy Service Companies (ESCOs) sell solar heat to clients instead of solar systems. To be profitable, the ESCO or contractors need to supply the energy over long contract periods between 10 and 20 years. For example, Austrian company S.O.L.I.D. has received a EUR 4 million loan for a huge solar cooling system in Singapore, which is being refinanced through an energy supply contract with the United World College over 12 years (see photo). One of the major problems of the solar thermal sector today is to find banks and investors willing to share such a long-term risk. One way out of this dilemma is to have credit security providers joining large-scale solar thermal investments. These providers cover the risk of underperforming systems or outstanding client payments. Public and private financial institutions are both able to prevent financial shortcomings. Case studies from Austria and Brazil show how important these financial guarantee schemes really are.
Photo: S.O.L.I.D.

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