Investment Motivation in Renewable Energy: A PPP Approach

Abstract

Access to energy has increasingly been provided by some governments through new alternative sources of energy known as renewable energy (primarily hydropower, solar, biomass, wind, geothermal). Renewable energy has become a strategic energy source for some countries as it provides clean, reliable, affordable and sustainable energy to millions of people. Negative externalities of fossil fuels together with positive externalities of renewable energy have driven the adoption of renewable energy technologies in some countries. As renewable energy technologies require high up-front investment, private sector capital, technology and innovation have often been claimed through public-private partnerships to supplement limited public sector funding in providing such public services. This paper will first review the externalities that have driven the increase of renewable energy projects. Successful international PPP practices in renewable energy sector will then been analyzed to identify key arrangements that contribute to mitigate the risks attached to a particular renewable energy project.