Event reports
FX hedging for renewable energy projects in illiquid markets (7th October)
Financing renewable energy projects in Asia has been challenging. The major reason of it being high exchange risk in the developing parts of Asia. Thus, investors need to put a lot of the resources in hedging the exchange risk. Climate Bonds Initiative, Astris Finance and TCX Fund launched a study to look at how the foreign investors use various hedging instruments for local currency projects, especially in underdeveloped markets. For more details, please find the link for the replay in https://www.youtube.com/watch?v=7VG93pnWO2Q&feature=youtu.be
Initial results of study on FX hedging for renewable energy projects in liquid markets (25th November)
The results of a study on FX hedging for renewable energy projects in illiquid markets by Climate Bonds Initiative, Astris Finance and TCX Fund was presented. The study looked at renewable energy projects in developing countries such as Myanmar, Sri Lanka, Nepal, Indonesia, and Vietnam to see how the power purchase agreements in these projects are structured to hedge the high exchange risk in using local currency for investment. For more details, please find the link for the replay in https://www.youtube.com/watch?v=BznP55QnOQw
How to advance green bond markets by providing support for cross-border flows (7th December)
One disappointing phenomenon in green finance is the low rate of investment in renewable energy projects. There are three main reasons for this: first, is the lack of long-term financing. As the major green finance sources being banks, their short to medium term resources cause mismatch of timeline compared with the long-term nature of renewable energy projects and thus unsuitable for funding these projects. Second, the low rate of return does not offer adequate incentive for long-term finance. Third, the current market actors lack capacity in financing green projects and renewable energy projects need to be “investor-ready”. In this webinar, it was suggested that applying the “spillover effect” to the power purchase agreements may be one way to attract long-term investment. For more details, please find the link for the replay in https://www.youtube.com/watch?v=CDEakyN-ne8
