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19 May 2022

Buried treasure: Financing interconnectors

Funding, Risk, Rules, Sustainability
WATCH ON DEMAND. Original air date: 26/5/22. A look at evolving economic and financial structures for developing interconnection assets.


Interconnection cables have played a crucial role in linking disparate power grids and making lower-carbon sources of electricity more available or less prone to curtailment.

The old model of getting interconnection capacity built - letting national utilities finance interconnectors on balance sheet - is still very common. But a new breed of transmission operators is exploring new revenue and financing structures.

Until now lenders have primarily had to get comfortable with permitting and construction risks, or more often park those risks on sponsors' balance sheets. But they are likely to view interconnection risks in a whole new way.

Joining Proximo's senior reporter Thomas Hopkins were three experienced players in the transmission and interconnection space:

Allan Baker, global head of power advisory and project finance, Societe Generale

Andreas Ruthemeyer, counsel, Clifford Chance

Gonzalo Cantabrana Fernandez, director and lead analyst: infrastructure and project finance, S&P Global Ratings

Key topics discussed in this webinar:

- The importance of interconnectors as part of the energy transition
- The role to be played by interconnectors in grid management
- The prevalence of corporate financings for interconnectors historically
- The emergence of interconnector revenue support mechanisms
- The growth of interconnectors as a project finance asset class
- Currency risk and construction risk for lenders in relation to interconnector projects

Proximo members can access the webinar directly here. Not yet a member? Find out more here.

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