We’ll share below an insider’s look into what makes an energy project bankable from a banker’s viewpoint, but first, we’d like to thank all the speakers and delegates who made the first day of EIC’s Bankable Energies a success.
Delegates learned a lot about what it takes for energy projects to be bankable and to reach the final investment decision stage. Policy was discussed in detail, including the need for predictable and stable energy policies that continue across political terms in order to achieve net zero target. We also heard from the EU’s Joanna Drake on ongoing efforts to reset UK-EU relations.
Tony Hable, Director, Infrastructure & Project Finance at Lloyds Bank Commercial Banking provided, in today’s final session, blueprint that gives energy companies a solid understanding of what they need to do to make their projects bankable and secure financing.
“This is how we look at a project from a bankability perspective: we always advise on five pillars,” Hable said:
1- Construction: Can the project be built on time, on cost and to the required specification to ensure obligations under revenue contracts can be met?
2- Operation: Can project operate in line with expectations and be sufficiently available to generate revenue?
3- Revenue Framework: Certainty of revenue and associated credibility of revenue counterparties.
4- Sponsor: Understand the value of a sponsor or shareholder investor who can bring credibility. We take comfort in a sponsor who is established in the sector with proven experience and committed financial resources.
5- Financing Structure: Application of financing structures/techniques taking into account the previous 4 pillars to bridge any potential shortfall in bankability.
“To make a transaction bankable, we use different techniques. We may ask for more equity, introduce standby debt, or leverage support from the national wealth fund, which is there to help projects by taking on some of the risk,” he added.
Delegates from financial institutions, government agencies, and supply chain companies also touched on the importance of collaboration and leadership in driving energy projects forward.
A recurring theme was the need for clear direction and steady project pipelines to build confidence across the supply chain. Without consistent work and predictable timelines, suppliers struggle to take on risks, especially for untested technologies. The message was clear: start small, build momentum, and create a community of success that paves the way for larger projects to follow.