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Green Energy Investment Likely to Fall in 2024

Global investment in clean-energy projects dipped this year and is likely to fall further in 2024, according to Nordic bank SEB.

The transition to clean energy has been shaken by rapid inflation and high-interest rates, which led to many projects becoming less attractive due to rising input costs and more expensive debt.

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That backdrop has slowed the flow of money into the sector, despite measures like the U.S. Inflation Reduction Act, the European Union’s raised renewable-energy targets and the COP28 climate talks.

According to SEB’s report:

Renewable projects drew $490 billion of investment in 2023, slightly less than the year before.

Investment next year is likely to fall 9%, the bank forecast.

Issuance of sustainable bonds and loans is likely to total $1.29 trillion this year, down 15% and marking a second straight year of declines. SEB forecasts a 10% rebound next year.

“Rising production and funding costs for renewable energy have led to a profit squeeze and a lower number of new projects in 2023,” said Thomas Thygesen, head of strategy and transition specialist at SEB.

A slew of renewable-energy concerns, including U.S. solar companies and European wind developers, have recently raised the financial alarm, contrasting with government policy which leans heavily on renewables to achieve climate goals.

Image: Green Investment