Report: Investors conditionally ready to back CCS development

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The financial world may be ready to invest the development of carbon capture and storage (CCS) projects, provided certain pre-conditions are assured, according a recent report by the non-profit Climate Group and Ecofin Research Foundation (New York, NY). The report surveyed 30 private-sector capital providers on their views of the risks and returns of CCS development and found three basic prerequisites for investment: a performance guarantee across the entire generation and capture chain; project sponsors with strong reputations and track records; and a route to market viability and competitiveness without public funding. The report said that specialist equity investors, which don’t take high-technology and construction risks, would not get involved in financing demonstration projects. By contrast, bond or equity holders from large pension funds or insurance companies would be comfortable with utilities using their balance sheets to finance CCS projects, provided that the scale is limited to a couple of percentage points of total group assets.

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