Introduction

This course provides an in-dept knowledge for students in the range of established practices, procedures and tools in finance that can be used to address the adverse effects of climate change on corporations from both an investor, bank, and corporate perspective. The goal of this course is also to increase the understanding of graduate students of the financing and investment decisions as they relate to renewable energy projects and renewable energy companies. As a result, graduate students will learn about the key topics in renewable energy finance such as the access to renewable energy, the business case for clean energy, project finance, and valuation of renewable energy firms. This course will provide the graduate students a solid foundation and introduction to this most important topic. Students taking this course will not only have the knowledge about renewable energy finance they need, but the understanding to put that knowledge to practical use.

Prerequisites: Basic knowledge in Corporate Finance, for instance, at the level of BT 321 or equivalent. Basic knowledge in Sustainable Finance, for instance, at the level of FIN540 or equivalent.

Course Objectives

Students will:

1. Develop the ability to describe numerous fundamental topics in renewable energy financing in clear and simple detail;
2. Learn the skills required to prepare a sustainable energy proposal for funding;
3. Gain knowledge about project finance, which is a growing financial technique that depends on the risk-adjusted cash flows of individual renewable energy projects, rather than the balance sheet, to support funding, while employing a diverse set of inter-disciplinary skills;
4. Learn how to use financial modeling to better understand the economics, risks, and sensitivity of a renewable energy project.

Course Outcomes

By the end of the semester, you should be able to

1. Explain in clear and concise detail many foundational concepts in renewable energy finance;
2. Discuss some of the key opportunities and challenges corporation are facing in their transition to renewable energy;
3. Build financial models for evaluating renewable energy projects and demonstrate good financing and modeling techniques in the development of these models;
4. Apply renewable energy finance mechanisms to a real-life investment case study;
5. Discuss opportunities, challenges, and enabling conditions for corporations to benefit from growing renewable energy investment opportunities.

Textbook

• The main resource for this course will be the case course pack and readings posted on Canvas. I do not require a textbook for this course.

Recommended Textbooks, Articles and readings

• The Rise of Green Finance in Europe Opportunities and Challenges for Issuers, Investors and Marketplaces by Marco Migliorelli and Philippe Dessertine, Palgrave Macmillan. ISBN-13: 978-3-030-22510-0
• Renewable Energy Finance: Theory and Practice. 1st Edition by Santosh Raikar and Seabron Adamson. Elsevier. ISBN-13: 978-0128164419
• Energy Finance and Economics: Analysis and Valuation, Risk Management, and the Future of Energy. 1st Edition by Betty Simkins and Russel Simkins. John Wiley & Sons, Inc. ISBN- 13: 978-1118017128
• Introduction to Project Finance in Renewable Energy Infrastructure: Including Public- Private Investments and Non-Mature Markets 1st Edition by Farid Mohamadi. Springer, ISBN-13: 978-3030687397
• Energy Project Financing: Resources and Strategies for Success by Eric Woodroof and Albert Thumann, Fairmont Press, ISBN-13: 9781420083866.
• Students are required to purchase a set of case studies related to the different topics of renewable energy finance via a course pack that is made available for purchase at the website of the Harvard Business Publishing Education. Students need to sign in as a student to access the materials of this course pack. The case studies covers important topics such as (1) energy efficiency investments, (2) valuation and acquisition of renewable energy companies, (3) regulation risk in energy investments, (4) renewable energy startups, and (5) private equity investment in renewable energy companies.

Pedagogy

To familiarize graduate students with the challenges and opportunities that arises through the implementation of a renewable energy strategy at the organizational and institutional levels, I will employ a mix of lectures, guest lectures, and applied cases.

Course Organization

The main concepts of renewable energy finance will be reviewed in class. My classes will also include case studies and presentations by industry professionals that integrate class material with real life decisions. I will use Canvas extensively to post reading material, presentation slides and for other communication.

Attendance and class participation; Case study, Midterm exam and final project

Attendance and class participation: We will follow a lecture and discussion format in the class. You are expected to come prepared to discuss the material assigned for each class. Your class participation is crucial to successful learning. Active class participation will also make the class discussion lively and exciting. I will keep track of your attendance and the comments that you make during class discussions. Regular attendance and active participation will constitute 20% of the grade.

Midterm exam: The midterm will evaluate the material covered in the first nine weeks of the class. The midterm constitutes 30% of the grade. Midterm will be based on all the material covered during the first nine weeks of the semester (lectures, lectures, videos, handouts, homework assignments, and case discussions). The precise details of the material covered by midterm will be announced in class closer to the exam. Midterm will be open book and open notes. There will be a makeup on the Midterm if you miss the midterm for legitimate reasons.

Homework assignment: There will be two homework assignments. The homework assignment will be submitted on Canvas. The first homework assignment will be a homework assignment about renewable energy economics. The first homework assignment constitutes for 15% of the grade. The second homework assignment will be a homework assignment about the modeling project cash flows and debt service of renewable energy projects. The second homework assignment constitutes for 15% of the grade. The two homework assignments together will constitute for 30% of the grade.

Final project

Final project (Selection of topic and group discussions)

In the first class, I will post many interesting topics in renewable energy finance on canvas. Please see Appendix 1 that is attached to this syllabus. The groups may choose any of those topics. This is a group project. The groups are also invited to produce a topic of their own and choose that as the topic of their group project. I expect the groups to meet multiple times in the various stages of their work on the project:

• Choice of project
• Selection of subtopics and relevant analyses.
• Allocation of work on the presentation, presentation slides, and project report. The presentation slides and the project report from each group. All groups will prepare and make a 10-minute presentation in class.

Final project presentation (Guidelines for presentation)

Each group will put together a well-organized presentation that takes no more than 20 minutes. Please involve multiple members of your group in the presentation. The slide-deck for the presentation should be uploaded on Canvas prior to the beginning of the session in which the project will be discussed. The entire group will be responsible for discussing the key issues of the project and preparing the presentation slides as well as the plan for the presentation. The group members will also be ready to answer questions on their project from the other students in the class. The maximum grade for the presentation will be 10%. See below for a general rubric for the grading of the project presentation. The group grade of 10% for the presentation will be allocated as follows.

• The novelty of the topic chosen, and the ideas presented: 2%
• The clarity and effectiveness of the organization of the presentation: 3%
• Use of data and relevant analysis: 3%
• The quality of Q&A: 2%

Final project report (Guidelines for project report)

Each group will put together a short report (6 pages double-spaced) presenting the central ideas that they have learned during the semester on their topic from their readings and group discussions. The report should be clear and well-organized. See below for a general rubric for the grading of the project report. The group grade of 10% for the report will be allocated as follows.

• Creativity in the topic choice and ideas discussed and analyzed: 2%
• Use of relevant data and analysis: 3%
• Integration of related topics learned in the course in the report: 3%
• Relating the concluding analysis to important ideas in sustainable finance: 2%