Scaling up Renewable Energy Assets: Issuing Green Bond via Structured Public-Private Collaboration for Managing Risk in an Emerging Economy

Jingyan Fu and Artie W. Ng
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Jingyan Fu: Institute of Resource, Environment and Sustainable Development, College of Economics, Jinan University, Guangzhou 510632, China
Artie W. Ng: Research Centre for Green Energy, Transport and Building, School of Professional Execution & Executive Development, The Hong Kong Polytechnic University, Hong Kong, China

Energies, 2021, vol. 14, issue 11, 1-16

Abstract: Green bonds have increasingly been utilized around the world as a source of financing for renewable energy development, designed with compliance requirements and measurable economic returns to investors, while mitigating climate change. However, the efficacy of green bond arranged in the emerging economies for financing renewable energy assets and how the underlying risks are managed have remained to be explored. The paper aims to examine the evolving green financial system sponsored by both public and private institutions in managing such risks within China’s emerging economy. A case study of green financing for a bundle of wind power assets led by a state-owned enterprise (SOE) reveals an alternative approach by structuring public–private collaboration while stipulating market-based financial incentives to institutional stakeholders under a political economy. This institutional consortium is composed of a state development bank, a commercial bank, credit rating agencies, institutional and private investors, regional power purchasers, and carbon trading entities. Financial stakeholders’ risk in such emerging sustainable investment is moderated by these participating institutions and structured “upsides” from carbon trading aligned with the framework of green finance and standards for green bond development. The results reveal the potentials of scaling up the development of renewable energy by adequately managing and sharing key risks, while allocating substantial funding into renewable energy projects under such a green financial system that is to be complementary with a scalable post COVID-19 economic recovery.

Keywords: renewable energy; wind power; green bond; China; climate change; public–private collaboration; risk management (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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