Green energy credit is commonly understood as loans that finance clean energy assets, such as onshore and offshore wind farms, and solar PV plants. The cash flows of these assets tend to be predictable, long-term, linked to inflation, and relatively contracted. In addition, they typically benefit from either governmentbacked contracted revenue – such as feed-in-tariffs, or revenue contracted through bilateral private sector agreements, such as corporate power purchase agreements. The loans – typically project finance loans – are long-term, floating rate, non-recourse, and sized on a conservative basis, with a lower maximum loan-to-value ratio than might be seen in other sectors, and benefit from a large security package. Lastly, due to the floating rate nature of these loans, they can offer protection against rising interest rates.

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