Financing first-of-a-kind climate assets

21 snips

Dec 21, 2023

This podcast explores the challenges of financing first-of-a-kind climate projects and discusses solutions such as off-balance sheet financing, structured finance, catalytic capital, and government programs. It also highlights examples of companies that have successfully solved the financing problem. The episode discusses the need for code switching between venture capitalists and infrastructure financiers, as well as David's checklist for first-of-a-kind entrepreneurs. The chapter descriptions include insights on clean energy tax credits, the role of catalytic capital and strategics, project finance expertise, creative financing models, and the journey towards building a mature asset class.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

ADVICE

Long-Term Greed

To invest in FOAK, adopt a "long-term greedy" mindset.
Focus on the potential for subsequent projects after the initial one succeeds.

ADVICE

FOAK Funding Options

Explore non-dilutive financing options for FOAK projects instead of relying solely on balance sheet financing.
Embrace government partnerships and seek catalytic capital.

ADVICE

Government as a Strategic Partner

Leverage government programs like the DOE's LPO program for pilot and FOAK funding.
Treat the government as a strategic partner in FOAK development.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

There’s a hole in the finance world. Fighting climate change means scaling up lots of new technologies, but financing those first-of-a-kind (FOAK) projects is incredibly difficult. New technologies involving things like sustainable aviation fuel, geothermal, and direct air capture can take a decade or more to scale up. But venture capital is too expensive for FOAK projects, while infrastructure finance is too risk-averse.

So what solutions could solve the FOAK financing problem?

In this episode, Shayle talks to longtime climatetech investor David Yeh. David has spent over 20 years in climatetech, including in roles at the Obama White House, Generation Investment Management, and the World Bank.

They cover topics like:

Different approaches to FOAK, like off-balance sheet, structured finance, catalytic capital, and government programs.
Examples of companies that solved the FOAK problem
Code switching between venture capitalists and infrastructure financiers. (Try using the word “innovative” with traditional bankers).
David’s checklist for FOAK entrepreneurs.

Recommended Resources:

Bloomberg: Grant From Bill Gates-led Fund Will Make Green Jet Fuel As Cheap As Fossil Fuels
CTVC: What the FOAK?

If you want more news and analysis like this in your inbox, subscribe to Latitude Media's newsletter and Canary Media's newsletter.

Catalyst is a co-production of Latitude Media and Canary Media.

Catalyst is brought to you by BayWa r.e., a leading global renewable energy developer, service supplier, and distributor. With over 22GW in their project pipeline, BayWa r.e. is rethinking energy every day and at every level. Committed to being a solid partner for the long run, BayWa r.e. wants to work with you to help shape the future of energy. Learn more at bay.wa-re.com.

Catalyst is brought to you by Sungrow. Now in more than 150 countries, Sungrow’s solutions include inverters for utility-scale, commercial, and industrial solar, plus energy storage systems. Learn more at us.sungrowpower.com.