​​Towards 2050, Denmark alone needs to invest up to DKK 1,400 billion in the green transition.

This is assessed by a new report from COWI, commissioned by the Financial Sector’s Climate Partnership. However, it is challenging to meet the investment needs with the necessary capital. Several green projects and businesses are currently facing challenges as they are impacted by their expected returns, while the risks involved in the projects are substantial. This makes it difficult to attract the required capital.

Part of the challenges stem from external factors such as inflation, strained supply chains, and rising costs, but there are also issues stemming from the political and regulatory frameworks governing the projects.

“When the conditions are challenged in green projects and it becomes difficult to make sound investments, the green transition loses momentum, and businesses cannot realise their projects. Therefore, we must work with solutions that inject finance and speed into the green transition,” says Carsten Egeriis, CEO, Danske Bank.

Therefore, the Financial Sector’s Climate Partnership in Denmark, with Carsten Egeriis as chairman, has asked COWI to conduct an analysis that reviews the major barriers and points to potential solutions to make it more attractive to increase financing and investments in the green transition. The analysis has, among other things, been based on extensive work to identify concrete models across Europe that have already proven effective in areas such as offshore wind establishment.

Five concrete recommendations
Based on COWI’s report, the partnership now launches five concrete recommendations to make it easier for companies and developers to finance and attract capital to green projects faster and on a larger scale.

1. Ensure stable selling prices for green energy
2. Support the sale of energy and necessary infrastructure
3. More flexibility to foster business development
4. Expand guarantee schemes for new green technologies
5. Faster case processing

COWI’s report makes it clear that it is crucial for green projects to be realised. The green transition has never been more important. Our competitiveness depends on access to cheap green energy, and the development of green technologies becomes a vital international competitive parameter.

The transition away from Russian gas and fossil fuels has also become a security issue, ensuring our supply amidst geopolitical instability. Lastly, we increasingly experience the consequences of rising temperatures.

Learnings from the best examples in Europe
As one of the largest banks in the Nordic region, Danske Bank and the rest of the Climate Partnership are firsthand witnesses to the challenges green projects face time and again in Denmark and in the rest of the Nordic region. Therefore, the five recommendations are largely based on good examples from abroad and on projects that have succeeded in creating a sustainable and healthy economy in the green transition.

“In the financial sector, we have a unique insight into how the winds are blowing, as virtually all projects and cases come across our desks. We have been able to see clear patterns in what has stood in the way and, therefore, also what needs to be changed to increase the pace of the green transition and restore profits for businesses,” explains Carsten Egeriis.

If the financial sector is to accelerate financing and investments in the green transition, we must, together with the state and politicians, create conditions for green projects to be economically sustainable so that they can attract the capital needed to realise the projects.