As the increasing
demand for energy consumption is rising, the fear of the exhaustion of
conventional energy sources is high. Energy consumption is increasing at an
alarming rate with the increase in population. And the climate change due to
greenhouse effect fuels up the possibility of extinction of conventional or
non-renewable energy resources.
Hence, the need to develop
renewable sources of energy is in great demand if the energy consumption level
cannot be controlled. Since we are in constant need for energy, the decrease in
the consumption level sounds quite impossible. Thus, opting for renewable
sources of energy is a wiser idea.
Energy can be obtained
from sun, wind and ocean waves. But, this requires implementing techniques and
the investment of huge money. Thus, these industries rely on funds for deriving
capital. Thus, renewable energy project finance seems to be exceedingly significant in contemporary times. At
present, energy project finance is a
global phenomenon. There is a large number of sponsors who are prepared to finance
such projects.
The
Need For Financing
Every big and small industry
requires funds to establish the entire setup for the proper functioning of the
system. Whether it is an oil and gas company or development of infrastructure,
capital investment is mandatory in every field. Even for the purpose of
business expansion, companies require a financial investment.
For oil and gas finance, there are several
investors who aid in providing funds to the companies for the development of
emerging companies or expansion of existing companies. These investors deliver
suitable financing solutions.
Apart from this, even
infrastructure development like roadways, railways, marine ports, etc needs
capital investment. Thus, there are even investors for infrastructure
financing. These investors consider investing in infrastructure as a means of receiving
long-term profit returns. It is basically a form of asset to them.
The infrastructure
fundraising comprises of infrastructure
debt fund. This implies an
investment tool which will provide or refinance the debts of the infrastructure
companies. A lot of candidates are interested in rendering such debt funds. One
good reason to do so is the steady cash flow. The debt investment is proved to
be less risky than equity investment. This is mainly because of interest paid
to the debt investors’ gains priority over the dividends. Thus, it is a
profitable investment.
