Lending Domestic Currency Accelerates The Transition to Renewable Energy
To accelerate the transition to renewable energy sources, the deployment of renewable energy technologies must be scaled up. The renewable energy sector is becoming more attractive for those looking for more cost-efficient and stable energy sources through the years as costs for its deployment steadily decline.
However, there are locations wherein most investments in renewable energy resources come from credit export organizations and international developments. Because of their low willingness to risk technologies not yet proven in their vicinity, domestic financial institutions are reluctant to lend financial aid to projects in developing renewable energy technologies.
Another thing that hinders financial investments in renewable energy technologies is the lack of finance for local currency. This project cash is often fluctuated in its local currency value. To mitigate the risks, domestic financial organizations are a major factor. Several reasons why local currencies and domestic financial organizations help accelerate the transition from fossil fuels to renewable energy are as follows: components of local currencies in the financing of projects can lead to significant reductions in risks in currency; channeling of funds can be done by domestic institutions from international institutions by turning the funds into smaller deposit loans in the form of the local currency, etc.