loans, guarantees or subsidies. These tools help make financing more affordable and accessible for critical projects. –De-risking innovative technologies: Innovative technologies with a strong business rationale but limited operational history require risk mitigation measures to become bankable. Governments and financial institutions can play a pivotal role in reducing or reallocating these risks through insurance and guarantee instruments (e.g. export credit agencies (ECAs) offering project-specific guarantees or insurances), thereby encouraging investment in such ventures. –Hedging offtaker risk: Clean energy requires substantial upfront investments, typically recouped over 10 to 20 years. This creates risks associated with market price fluctuations, which affect even mature technologies and pose even greater challenges for early adopters of new products and in emerging markets. To reduce these risks, it is important to ensure that offtake agreement protection is available through financial tools that guard against price swings (e.g. price floors established through contracts for difference (CfD) or hedging instruments such as swap agreements).Fixed interest rates and long-term contracts can also help provide stability. By managing these risks, companies can make their finances more stable and predictable, widening the potential pool of investors. –Mobilizing capital to developing countries: Mobilizing capital for developing countries, on both the debt and equity side, is critical to achieving global energy transition goals. This includes the use of blended finance solutions (e.g. combining public and private funding through development finance institutions (DFIs), concessional debt from governments and philanthropic capital) to fill investment gaps and to make projects more attractive to private investors. Addressing these challenges requires a standardized approach. Collaborative efforts among investors, industry executives, policy-makers and financial institutions are essential. Implementing these measures can help foster an inclusive and attractive landscape for investors, leading towards a sustainable energy future. Financing the Energy Transition: Meeting a Rapidly Evolving Electricity Demand 7

Financing the Energy Transition 2025