The role of institutional investors in financing sustainable energy

Thesis

In the COP 21 Paris Agreement, Parties agreed to hold the increase in the global average temperature to well below 2°C and to make finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development. The scale of investment needed in sustainable energy for this transformation is so large that it will, inevitably, have to rely in large part on mobilising private capital. A key potential source is the capital controlled by institutional investors. This thesis focuses on examining and improving the understanding of the role of institutional investors in financing sustainable energy, the barriers to investment, and how they may be surmounted.

One of the central contributions is the articulation of an original methodology and framework to understand and monitor what policy settings, financing instruments, risk mitigants and transaction enablers might be most effective and appropriate with regards to scaling up institutional allocations through a variety of principal investment channels. The thesis also examines the role of the debt capital markets, including the emergence of the ‘green bond’ market. I argue that if there is concerted attention by policy makers and market participants, the bond markets can be relied on as a critical foundation for mobilising institutional investors and raising part of the debt financing that will be needed for the transition to a low-carbon economy.

Underpinning the analysis is an empirical base of 110 examples of institutional investment in sustainable energy projects. It is hoped that this framework, along with the analysis, conclusions and policy recommendations, can assist in creating the fundamental settings needed to study how to scale up and mobilise greatly needed flows of this type of investment.

Authors: Kaminker, C

• Type of award: DPhil
• Level of award: Doctoral
• Awarding institution: University of Oxford
• Language: English
• Keywords: Sustainable energy; Institutional investors
• Subjects: Renewable energy sources; Institutional investors