Ed Zaelke Quoted in Law360 Story on Project Finance Trends of 2016
Ed Zaelke, chair of Akin Gump’s global project finance practice, was quoted in the Law360 story “Power, Renewables Spurred Energy Finance Trends In 2016” regarding some of the top energy project finance trends that stood out this year.
Among them, according to the article, was the effort to secure long-term power purchase agreements (PPAs), which it says are critical for renewable developers looking to gain financing for their projects.
“After 35 years of renewables being really fueled by environmental concerns and jobs, we now have close to price parity with other forms of energy,” said Ed Zaelke. “It’s affordable to be green.”
Zaelke added that while corporate power purchasers have increased developers’ chances of getting their projects financed, securing financing with a corporate PPA is more challenging than securing financing with a utility PPA. “You have different credit risks, and you don't have the backstop of the public utility commission if something goes sideways,” he said. “Lenders are going to be a little more careful, and the structure presents some additional challenges.”
Another trend seen in 2016 noted in the article was the growth in direct investments in renewable projects by pension funds and other institutional investors, with billions of dollars, being poured into so-called green bonds that are used to finance renewable energy and other environmentally friendly projects.
The returns on these investments, Zaelke said, can be “a little boring,” but he added, “the technology is improving and is better than what [they] might be able to get elsewhere.”