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Early stage project development entities
Project approaches canvassed in this paper will need fresh effort in the project development stages. We believe that there is currently a lack of appropriate project development vehicles working in the space between government and the private sector to unlock private investment for renewable energy and other climate change mitigation projects.
These structures would bring projects to a stage where they are more attractive for investment by institutional investors and the wider private sector. This need has already been recognised for projects occurring in developing countries. However there would be great value for such structures in developed countries where a large number of projects cannot see the light although there is no shortage of capital available.
The role of these companies would be to focus on early-stage project development, to bring forward projects to a point and structure them in such way that fund managers would be prepared to commit capital. In cases of large infrastructure projects these Project Development Companies may be working alongside governments in particular in developing countries.
These companies are likely to be most effective if they are managed and run by the private sector. The skills for a successful execution of the role are typically found in private sector companies. Given the level of risk these companies will have to bear, some levels of governmental financial backing seem necessary to allow them to work efficiently and reach a scale able to make a difference.
These Project Development Companies should be structured so that it provides adequate enough incentive to efficiently bring a large number of valid projects to a point where they can win development funding.Porkect