Finance Experts Call for Innovative Funding Models to Boost Balkan Renewables

A panel of finance experts at Energy Week Western Balkans 2024 highlighted the urgent need for innovative financing models to support the growing demand for renewable energy in the region. Representatives from the European Bank for Reconstruction and Development (EBRD), UK Export Finance (UKEF), and Finance in Motion discussed tailored financing mechanisms, such as long-term power purchase agreements (PPAs), blended finance structures, and bridge-to-merchant financing, that could address the high capital costs and long lead times typical of renewable projects. 

EBRD’s Remon Zakaria pointed out that a lack of stable, long-term revenue structures, coupled with regulatory uncertainty, deters private investment. He stressed the importance of PPAs in providing secure cash flow for renewable developers, allowing them to attract private capital. UKEF’s representative, Duško Krsmanović, added that public institutions like UKEF can play a vital role by enhancing the credit profiles of sovereign-backed renewable projects, reducing financial risk for commercial banks and private investors. 

With the Balkans facing a critical juncture in its energy transition, finance leaders underscored that international development banks, export credit agencies, and private sector lenders must collaborate to develop flexible and innovative financial solutions. According to Zakaria, the Western Balkans has tremendous renewable potential, but tapping into it requires alignment of funding mechanisms with project realities, as well as collaboration with local governments to remove barriers. The session reflected the evolving financial landscape for renewables, where the focus is increasingly on structuring investments to balance risk, return, and sustainable development goals.