Bankability of Defossilised First-of-a-Kind Chemicals & Fuels Production Projects
report
Europe has developed most of the next-generation technologies needed to defossilise its industries, but for some pathways technical and economic challenges remain. Success in invention must now be matched by success in large-scale replication. What is largely missing are effective mechanisms to accelerate deployment and mobilise financing for these technologies. The FOAK projects hold the key: they must prove operational performance and build new value chains to turn national ambitions into tangible production capacity. Most FOAK projects never leave the engineering stage due to high-risk profiles and substantial investment requirements, thereby trapped between venture capital & growth equity and commercial debt. When government support is deployed to absorb risks beyond what market parties can cover, FOAK projects can move from being viewed as demonstrations to bankable assets, a critical shift for unlocking Europe’s clean industrial transformation. Public capital and government intervention are not substitutes for private investment, but catalysts that make it possible. Targeted guarantees, concessional loans, and performance-based grants are essential to bridge non-bankable exposures and attract commercial debt. When governments assume the residual risks of FOAK projects, they can unlock debt financing from private lenders. Every euro of public capital can mobilize around five to ten euros of private investment, turning policy ambition into investable infrastructure.
TNO Identifier
1020016
Publisher
TNO
Collation
14 p.