Power project finance targets - financing for construction phase - impact on target

Hello,

I am looking at a bank’s power project finance portfolio and near term target. The challenge I am coming up against is that banks finance renewables projects at the construction phase, which may not be in the book at the operation phase. Therefore, when designing a strategy to meet a near term target, there is no way to demonstrate the impact of financing the construction of renewables projects. A bank may be doing a lot to finance the transition but end up missing their target, because of the point in the lifetime of the project it is financing.

Is it possible for a bank to calculate its project finance emissions in such a way that enables it to demonstrate transition finance? For example, assuming that projects in construction are operational in terms of emissions or generation; or setting a target based on lifetime project emissions (i.e. accounting for the full lifetime operational intensity of a windfarm in a given financed emissions reporting year).

Many thanks,

Ana

2 Likes