The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookiesbefore using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Green capex lending faces up to the reality of an energy crisis

Banks want to capitalize on the surge in green capex borrowing as corporates rush to decarbonize. Cost inflation has increased the risks involved but not the long-term benefit of carbon reduction.

Photo: iStock

The structural capital expenditure needs of corporates are undergoing rapid change, as firms rush to exploit investors’ seemingly insatiable appetite for cleaner assets. However, uncertainties around stranded assets and returns on investment are now top of mind for those lenders as the global energy crisis drives up input costs.

The International Energy Agency projects that transition-related investments must reach $4 trillion annually by 2030 to meet net-zero targets under the Network for Greening the Financial System 1.5-degree scenario; while a recent McKinsey report puts average annual spending on physical assets at $9.2 trillion a year by 2050.

Much of this spending will be driven by corporates’ evolving infrastructure and technology needs.

Most companies that are trying to build out green infrastructure now are faced with cost inflation and keep having to update expenditure plans
Paul O’Connor, JPMorgan

Goldman Sachs expects primary energy capex to grow 60% by 2025 to $1.4 trillion, according to a recent Carbonomics report.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?