Guarantee fund makes sustainable energy projects financeable

The financing of sustainable energy projects is coming increasingly under pressure. An important barrier: many companies wanting to purchase electricity are not sufficiently creditworthy to sign long-term contracts. This makes it risky for financiers to invest billions in new wind and solar farms, while such investments are crucial for the energy transition. Invest-NL previously researched whether a guarantee fund for corporate Power Purchase Agreements (cPPA’s) could provide a solution. In this new report, we now present the blueprint for such a fund.

Why a guarantee fund?

Many companies – especially in the SME sector and industry – lack the creditworthiness to enter into long-term purchase agreements. Lenders often do not accept that risk, resulting in many projects not getting off the ground.

A guarantee fund can break that barrier. It covers a part of the credit risk: if a customer can no longer meet their obligations, the fund steps in. This allows more companies to enter into a cPPA and gives financiers the security needed to fund projects. In this way, the fund contributes to three crucial objectives:

the large-scale realisation of sustainable energy projects;

better access to sustainable energy for industrial and SME companies;

mobilising private capital for the energy transition

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Warranty fund for Corporate Power Purchase agreements

Energy

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25 september 2025

Warranty fund for Corporate Power Purchase agreements

Blueprint and Impact

The blueprint shows that with a buffer capital of € 60–70 million, approximately 3.6 TWh of power contracts can be guaranteed annually. This is comparable to 10% of the industrial electricity consumption in 2022.

The leverage effect is substantial: every euro in the fund enables up to € 60 in project financing, amounting to around € 3.6 billion in investments. The blueprint indicates that the premium for the guarantee is expected to be between € 1.50 and € 3 per MWh. This makes it affordable for consumers and attractive to investors.

Broad Support

Developers, banks, and companies see the added value of this instrument. Policy makers also endorse its importance: the European Commission’s Clean Industrial Deal mentions a PPA guarantee fund as an important tool to achieve affordable energy. The government has already reserved € 1 million to enable the establishment of the guarantee fund. This marks an important first step towards realization.

With this guarantee fund, the Netherlands can ensure that financing for sustainable energy projects remains accessible and that more companies gain access to green power. A crucial step to keep the energy transition feasible and affordable.