Financing Community Energy – A short guide for banks

Community energy projects, just like traditional projects, run through different stages in their lifetime, and each stage comes with specific needs, including financing. It is typically in the implementation stage, when licenses have been obtained, studies have been conducted and construction works are ready to start, that energy communities look for bank loans to cover a part of their investments.

This finance guide for bank representatives helps banks and other representatives of financial institutions better understand the specific context and (financial) needs of energy communities. The guide sets out some of the key questions bankers institutions might ask themselves before engaging with energy communities and funding community energy projects. What is community energy? Why is it important in the first place, and how does it work exactly? It discusses the potential risks that come with community energy projects and looks into strategies to overcome or minimise those. Risk mitigation strategies like guarantees, power purchase agreements or special purpose vehicles get the attention they deserve, whilst looking into different ways energy communities make money. Finally, some of the most successful collaborations between banks and energy communities are presented.

The target audience of this guide are bank representatives and other related financial institutions who want to get familiar with community energy as a stable and yet future oriented field of activity and who are looking for inspiration to pursue a collaboration with energy communities. As an energy community, you can use it to inform banks on financing community energy and convince them to consider supporting your project.