Abstract

The accelerated deployment of clean energy projects is central to global decarbonisation, yet many still struggle to achieve bankability and reach financial close. The obstacles increasingly lie beyond technological maturity, arising instead from non-technical risks. This article argues that contractual risk allocation remains one of the most effective instruments for transforming such uncertainty into financeable risk-not by eliminating it, but by structuring, distributing, and pricing it so that lenders and sponsors can support capital-intensive investment. Examining how EPC contracts, offtake arrangements, and financing agreements operate as interfaces between public policy and private capital, it focuses on three risks that prove decisive in practice-grid access and network constraints, human capital and execution capability, and supply chain dependency-and on the contractual techniques used to allocate them among project participants. It then draws these strands together from the financing perspective, showing how revenue certainty-through power purchase agreements and contracts for difference-and the lender’s bankability assessment determine whether contractual protections translate into financeable risk. Drawing on EU policy and French project-finance practice, it concludes by examining the limits of contractual allocation, where permitting, regulatory, and labour-market risks remain only partially contractualisable.

This paper will be part of the OGEL Special Issue on "Clean Energy Projects and Risk Mitigation". More information here www.ogel.org/news.asp?key=841