Banks financing renewable projects in the Western Balkans increasingly need to understand not only whether a project can produce electricity but whether its intended customers can use that electricity in the way assumed by the business plan.
CBAM is pushing that question into renewable-energy due diligence.
The issue is especially important where project revenues depend on exports to the EU or premium supply to export-oriented industry.
How the model works
Traditional renewable-project due diligence examines resource, construction, grid connection, permits, operating costs and contracted revenues.
The additional layer examines the commercial usability of the electricity attributes.
If a project assumes that its output will command a premium because it supports the customer’s carbon strategy, lenders need to determine whether the contractual and evidence structure actually supports that claim.
That can include PPA architecture, metering, generation allocation, certificates and delivery arrangements.
Commercial impact
A PPA may look bankable from a conventional power-market perspective but be weaker if part of its premium depends on a carbon claim that cannot be substantiated.
Conversely, strong documentation and allocation systems can make renewable output more valuable to sophisticated industrial buyers.
Banks may therefore increasingly add a carbon and evidence due-diligence workstream alongside legal, technical and financial reviews.
Who benefits
Projects with strong evidence architecture gain an advantage.
Banks get better visibility over green-premium revenue assumptions.
Industrial offtakers receive electricity products designed around their sourcing needs.
Technical, legal and verification advisers gain additional due-diligence work.
Why it matters now
Renewable projects across Southeast Europe are being financed with increasingly diverse combinations of merchant exposure, CfDs, guarantees and corporate offtake.
The next lending question is therefore not simply:
Who buys the electricity?
It is:
Can that buyer use the renewable and carbon characteristics in the way the project’s revenue model assumes?
By Virtu.Energy