Financing hydroelectric power plants: a review and evaluation of financing channels
International Journal of Energy Sector Management
ISSN: 1750-6220
Article publication date: 24 November 2020
Issue publication date: 22 January 2021
Abstract
Purpose
This study aims to identify project funding shortcomings in the existing literature and evaluate the financing channels accordingly.
Design/methodology/approach
This paper uses a structured literature review – a content analysis method. Then, the comparative analysis applied to data gathered from the content analysis.
Findings
To define the main research topics and establish a focus on hydroelectric power plant (HEPP) financing, a comprehensive structured literature review was conducted. According to the results of this study, there are three main categories of HEPP financing studies in the literature, namely, financing channels and products, factors that complicate financing and financing- risk relationship of HEPP projects. According to these findings, which criteria most affecting HEPP financing and which financing channel is the most suitable are determined.
Research limitations/implications
Among all financing channels, only direct debt sources are selected.
Practical implications
This study is structured as a simple lender selection guide for HEPP investments. Selection criteria are applicable for both lenders and investors. For lenders, those criteria are expected to improve loan performance and optimize financial product selection. For investors, those criteria are expected to help choosing suitable products and improve revenues.
Social implications
This study will contribute the researchers those intended to work on the topic.
Originality/value
This study will contribute to limited literature on HEPP financing. Project finance literature is limited and narrow even there is no study that investigates hydropower project finance sourcing. In this manner, this study can be considered as a pioneer.
Keywords
Acknowledgements
The authors would like to thank Senior Project Financier Ozlem Kildir for providing useful information on financing channels and products and an anonymous reviewer for helpful and constructive comments.
Citation
İpin, S. and Ercan, T. (2021), "Financing hydroelectric power plants: a review and evaluation of financing channels", International Journal of Energy Sector Management, Vol. 15 No. 1, pp. 58-80. https://doi.org/10.1108/IJESM-04-2020-0001
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited