Financing Sustainable Energy Projects: Position Paper Points to Alternative Finance

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The EU has ambitious goals on fostering sustainable energy projects but frequently financing is hard to find.  A newly published position paper, produced in concert with Citizenergy, on the challenge is pointing to alternative finance as a significant part of the answer.

According to the document, crowdfunding and cooperative structures may go a long way towards filling the investment gap at the local level if given support. The paper, which was written with wide-spread local authority input and has been backed by an array of investment platforms, NGOs, universities, and professional associations, was issued in the framework of the EU-funded Citizenergy initiative for public engagement in sustainable energy financing.

elise-steyaert Elise Steyaert of Climate Alliance, a city network dedicated to climate and energy issues, explains;

“While many local authorities have important renewable energy and energy efficiency projects planned, they are often too small-scale or too geographically scattered to be attractive for conventional financing via banks. Alternative financing models, integrating the public via cooperatives and crowdfunding, can help municipalities keep assets local and get around this barrier – especially in the field of sustainable energy.”

Stayaert says that municipal use of alternative, citizen-based financing measures can help cities and towns raise vital public support for their sustainable energy efforts by motivating people to get directly involved.

There are, however, a number of hurdles. The paper points to local level uncertainty as to the viability of alternative financing solutions, the legal frameworks surrounding their use and the possibilities to integrate them with conventional finance.

Other factors stifling the spread of alternative financing solutions for sustainable energy on the local level include procurement barriers, which can make it difficult to work with potential solution providers and debt ceilings, which restrict the amount of debt local authorities can raise on their assets.

The paper is supportive of the European Commission’s efforts thus far that encourage crowdfunding and other alternative models. But the authors call for more pro-active action from the Commission.

The paper is embedded below.


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