Research | Higher cost of finance exacerbates a climate investment trap in developing economies
Higher cost of finance exacerbates a climate investment trap in developing economies

Higher cost of finance exacerbates a climate investment trap in developing economies

30 June 2021

This study investigates how different weighted average cost of capital (WACC) assumptions impact decarbonisation pathways for developing economies. The results demonstrate the disproportionate impact of high capital costs between regions, with green electricity production potentially 35% lower in Africa, increasing the risk of a climate investment trap.

 

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