The role of institutional investors in financing sustainable energy infrastructure

This chapter discusses the role of institutional investors in financing sustainable energy infrastructure. The chapter commences with a review of the rationale for investment in sustainable energy infrastructure and explores the financing needs and economic opportunities for the transition to sustainable energy provision. The chapter proceeds to highlight the strained financing capacity of governments, utilities and banks for sustainable energy project finance. Practical information is provided on the financial capabilities of institutional investors, as well as an examination of how their assets are allocated and their investment decisions are made internally. The barriers to institutional investment in sustainable energy are then explored. The chapter provides information on the state and trends of institutional investment in sustainable energy and emerging channels that hold significant promise for scaling up institutional investment, including green bonds, YieldCos and direct project investment.