Warranty fund for Corporate Power Purchase agreements

The financing of sustainable energy projects is coming under increasing pressure. A major barrier: many companies that want to purchase electricity are not sufficiently creditworthy to enter into long-term contracts.  

Invest-NL previously investigated whether a guarantee fund for corporate Power Purchase Agreements (cPPAs) could provide a solution. In this new report, we now present the blueprint of such a fund. 

A guarantee fund covers part of the credit risk: if an off-taker can no longer fulfill their obligations, the fund steps in. This enables more companies to enter into a cPPA and provides financiers with the assurance needed to finance projects. In this way, the fund contributes to three crucial goals: 

• the large-scale realisation of sustainable energy projects; 

• better access to sustainable energy for industrial and SME companies; 

• mobilising private capital for the energy transition