Green infrastructure and business financing and advising

Providing sustainable products: According to forecasts by leading energy experts, the trend towards renewable energy will become even stronger worldwide in the next few years. More money is already being invested in the generation of renewable energy than in fossil-fuel and nuclear power plants combined.

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Demographic change, increasing natural resource demands, urbanization and the growing significance of environmental aspects are creating a growing need for investment in all types of infrastructure. The World Economic Forum estimates that US-Dollar 5.7 billion worth of green infrastructure could be needed by 2020 in order to realise environmental policy objectives in sectors such as agriculture, transport, power and water.

More and more companies and public bodies – such as sovereign states and supranational organizations – are actively involved in this area. We advise and support them to meet the financial requirements for their challenging projects.

Financing a transforming energy landscape

Our business division Corporate Banking & Securities (CB&S) handles transactions involving project finance in the renewable energy sector. The division provides advisory and financing services to companies and public bodies – such as sovereign countries and supranational organizations – in conjunction with mergers and acquisitions as well as issuances of bonds or shares.

As part of our corporate finance business, we support companies in the renewable energy sector with extensive advisory and financial services. Our project financing team has been supporting similar activities since 1999, structuring financing solutions and providing capital for each phase of a project’s life cycle. The technology focus is on onshore and offshore wind, solar PV, solar thermal and biomass transactions.

Economic growth can be boosted by investments in infrastructure. Several countries are therefore examining how to increase investments in green infrastructure. In 2013, Deutsche Bank allocated more than US $1.2 billion to clients’ renewable energy projects. This makes us one of the top three private-sector project financiers in clean energy globally. We advised and provided financing to facilitate the construction of solar, wind and run-of-river hydro power as well as waste-to-energy projects with a total capacity of more than 1,185 MW, worth more than US $3.6 billion. 

The transition to low-carbon growth

Governments, companies and investors are increasingly acting on environmental issues such as climate change
by instating legislation, changing business models and policies and by revising investment processes. For instance:

  • 138 countries have renewable energy targets and 66 countries have feed-in tariffs
  • Over 40 national and 20 sub-national jurisdictions covering 20% of global emissions have either implemented or are considering mechanisms that price carbon emissions
  • The EU proposed changes to its carbon market as well as a 2030 emissions reduction target to address the oversupply in carbon allowances caused by the recession

These actions, however, are not yet sufficient to reduce the risks of climate change according to official expert bodies.
The International Energy Agency concluded that no more than one third of proven fossil fuel reserves can be used if
global warming is to be limited to 2˚C.

The non-diversifiable nature of climate change risks – such as restrictions on fossil fuel use – is of increasing concern to major pension funds, insurance companies and other investors. Investors with nearly US $3 billion in assets wrote
to major oil and gas companies, citing their concerns about the viability of their current capital expenditure plans,
potential stranded asset risk and their risk exposure to the physical impacts of climate change.

Green Bond Principles

We joined a consortium of investment banks in supporting the Green Bond Principles – voluntary guidelines to encourage transparency, disclosure and integrity in the development of this environmental finance market.
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Growing need for investment

US-$ 5.7 trn

of investments in “green” infrastructure required by 2020 (estimated by World Economic Forum)

“Moving to a green economy will require US $1 trillion per year in clean energy investment by 2030 – four times the current investment volume. Innovative financing solutions are thus called for. That’s why I am proud to actively apply my financial expertise to renewable energy investments.”

Bhaswar Chatterjee, New York He leads Deutsche Bank’s Americas Energy and Infrastructure Finance team.

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