Financing costs vary… a lot!


 

NOTES:

Financing costs are an important contribution to the overall lifetime cost of a renewable power project. They significantly change the energy price that a project needs to secure in order to meet its business objectives. 

It’s often underestimated just by how much financing costs can vary, even in countries geographically close together. The reality was illustrated by a study looking at onshore wind projects in the EU, undertaken by Dia-core in 2015. Their findings, in the form of debt costs, equity costs and financing structure (debt/equity split) are shown in the chart below. 

The key takeaway of a chart like this is not the specific numbers or countries! These will change over time, and you may be reading this from some other country anyway, on the other wide of the world.

What it should impress on you is the importance of not assuming that financing costs in one market can be applied in your own, even if that market is right next door. Indeed they could be substantially different.

 

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