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Victoria Mindova

Lack of funding turned out to be the biggest problem of Europe in its attempt to impose environmental friendly methods of energy production. So-called green economy, or rather the enacting of large project to produce energy from renewable sources at first sight is a concept on which agree both society and politics. In practice, however, it appears that beyond theoretical discussions the question remains "How are we going to find the money?"

The well known methods and technologies are still offering solutions that are imperfect from an investment or a practical point of view, which turns out to be the biggest enemy of the green economy. Nevertheless, Europe continues to seek a common platform in which to meet the needs of business and the environment, so that with joint efforts to find new ways to reduce harmful emissions in the atmosphere by at least 20% by 2020.

80% of the financing of green projects in Europe come from the private sector. The problem, however, is that after global economic collapse in late 2008, the banks today are not enthusiastic about the projects related to renewable energy sources. The main reasons are that there it still lack of sufficient guarantees and the financial institutions prefer to invest money in more traditional sectors. The suggestion of Jorgen Lang from the HSH Nordbank is to seek new investors from the insurance business and private pension funds, which are also currently looking at ways to make some new investment. Problems with this suggestion are that these financial institutions do not have yet developed models for analysis risks and the results of this type of investment and are still reserved to the financing the production of energy from renewable energy sources.

About the challenges facing the projects for the production of energy from alternative sources spoke the Director of Asset Finance & Leasing at Deutsche Bank Thomas Resken. He said countries like Spain, Italy and Greece have made a gradual rise in the development of new programs related to the construction of wind and solar generators, as the leader between them is Spain. This boom lasted until 2008, then banks have become much more cautious. The main problems that prevent investors is that some technologies are still in their probationary period. Others are more advanced but still the electricity produced is more expensive than that produced by already known methods, which however are environmentally unacceptable.

He stressed that the projects of the Mediterranean countries must be competitive to be able to compete for funding with other initiatives in Western Europe and North America. Therefore, he advised the initiatives of the Mediterranean first to unite so as to have more weight on the market of the environmentally friendly energy produced. Also to make sure there are analysts examining risk, cash-flow consultants and in general teams of specialists who can develop risk-free models to show that they are competitive and reliable to the future investors. Businesses that are oriented towards the development of eco-friendly projects, should convince investors that in the long term they will be able to have returns on the investment and that the project will have success. Here is the role and the public sector in each country separately to ensure a stable environment for the development long-term plans (tax policies permanent regulations, etc..) as well as consolidated policy in the field of development and operation of renewable energy sources.

Plutarchos Sakellaris Vice-President of the European Investment Bank, spoke about the Mediterranean Plan regarding the solar energy, which unites the countries of southern Europe, North Africa and Middle East. The aim of the plan is to overcome the challenges posed by the increased demand for energy and the provision of environmentally friendly solutions for its production. According to the Mediterranean Solar Energy Plan by the year 2020 the countries in the pact should produce 20GW of energy from renewable sources, and should build international relations that will have the necessary capacity to carry the electricity produced. European Investment Bank plans by 2012 to have 25% of the loans granted by it to be associated with the development of pro-environmental projects. Nevertheless Plutarchos Sakellaris stressed that financing might not be sufficient for the Mediterranean project, so they must also seek new investors. He expressed confidence that the project will be successful and in the long run it will give good returns, but the important thing is for entrepreneurs now to convince investors in the security of their investments.

Interesting project was presented by the members of the board of DESERTEC Foundation, who are developing the idea for the construction of a giant solar plantation in the deserts around the world. It will produce pure energy that can be generated in the deserts and to provide the humanity enough electricity produced without any negative consequences for the environment. "Six hours of sunlight in the desert generates more energy than humanity consumes the entire year," said Oliver Steinmetz. He acknowledged that the initiative of DESERTEC Foundation has found great support from various corporate groups and industrialists. According to him right now is a good time for the investors to turn to the development of green projects like this because the world will inevitably need eco-friendly solutions in the future. Companies which supported the project from the outset, will always have a larger share of the profits than those which joined later.