TNO: Bankability of Defossilised First-of-a-Kind Chemicals & Fuels Production Projects

To accelerate the fossilization of Europe’s industry, the success in innovative technologies must be matched by success in large-scale replication. FOAK projects are therefore highly relevant to prove operational performance and build new value chains to turn national ambitions into tangible production capacity. However, mobilizing finance for these projects is difficult due to the high-risk profiles and substantial investment requirements. This leaves FOAK projects trapped between venture capital and growth equity and commercial debt. In a recent report by TNO studies how the bankability of first-of-a-kind (FOAK) for sustainable chemicals and fuels can be improved. This study covers:

i) the main risks across the value chain for financiers,

ii) requirements of lenders to participate in these projects, and

iii) potential public finance instruments that may assist with closing residual risk gaps the market cannot absorb.

You can find the publication here.

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