Investment in sustainable infrastructure has increased from $275B in 2020 to $627B in 2021, with solar power generation projects overtaking wind power generation for the first time. The recently passed Biden administration’s big budget plan (signed yesterday) to rebuild the US while shifting to cleaner energy sources, the EU’s Green Deal and multiple net zero target means this shift of financing shows no sign of slowing down.
However, according to analysis at Refinitiv, challenges in the supply chain, inflation, geo-political and price hedging arrangements mean that many projects are currently suffering financial challenges or delays.
According to the Refinitiv sustainable infrastructure data and report just released, there were a total of 1521 renewable and nuclear projects announced in 2021. Under 4% of the solar and wind projects announced in 2020 have been completed so far.
And for investors, as more ‘pile in’, ensuring financial and delivery risks are fully understood is critical, so that expensive delays do not turn into negative returns. And from a complete sustainability picture, the question of course is not just when and how these projects will come online and help decarbonise the world’s energy supply, but how green and fully sustainable are they?- There are few global standards, reporting and audit mechanisms for the natural world and the impact of infrastructure projects, something that should and will change over time. TNFD is working on through the sector groups so that investors understand the full environment impact and value of “green” infrastructure investments
To see the full Refinitiv report here