ENERGY FINANCE

Financing of Energy Infrastructures

Financing of Energy Infrastructures

Energy Infrastructure

Infrastructure is the basic physical and organizational structures needed for the operation of a society or enterprise, or services and facilities necessary for an economy to function. It can be defined as the set of interconnected structural elements that provide framework supporting an entire structure of development.

The term typically refers to the technical structures that support a society, such as roads, water supply, sewers, electrical grids, telecommunications, and so forth, and can be defined as "the physical components of interrelated systems providing commodities and services essential to enable, sustain, or enhance societal living conditions" (Dilli 2007, 58). Viewed functionally, infrastructure facilitates the production of goods and services, and also the distribution of finished products to markets, as well as basic social services such as schools and hospitals; for example, roads enable the transport of raw materials to a factory. In military parlance, the term refers to the buildings and permanent installations necessary for the support, redeployment, and operation of military forces.

Electricity

The electricity infrastructure includes a nationwide power grid of long-distance transmission lines that move electricity from region to the region, as well as the local distribution lines that carry electricity to homes and businesses (Herbert 2007, 85).

Restructuring

The electricity industry has undergone substantial changes in the last two decades. These changes affect how our electricity infrastructure operates. Major industry restructuring has separated once vertically integrated electric utilities that supplied generation, transmission, and distribution services into distinct entities.

Energy Trading

Carbon finance is a branch of the finance developed, arising from market mechanisms included in the Kyoto Protocol. The aim is to reduce in the atmosphere emissions of greenhouse gases by promoting financial investments in cleaner technologies.

These two sectors encouraged to grow in the years to come. In a context, of increasing global energy demand and the price of natural resources, carbon finance aims to reduce dependence on fossil fuels, including the dependence on oil. Awareness of the impact of human development on the environment is a necessity revealed by visible changes which economic impacts can be detrimental to the prosperity of the community and to create wealth on a global scale.

The carbon market based on an absolute fact: no matter where on the planet where we reduce greenhouse gases, they always produce the same positive effect. This market is emerging as a powerful tool for reducing emissions of greenhouse gases (GHGs) and to transfer financial resources and clean technology to the developing world. In this regard, the World Bank continues to support market mechanisms with the goal of reducing emissions in developing countries (Kim, 2010).

At first, the Bank played a catalytic role in the global market for carbon emission reductions through the creation of the type to Reduce Carbon Emissions in 1999. Today, the institution is a trustee of 10 carbon funds and facilities and two post-2012 mechanisms, which capitalized at U.K. $ 2,740 million, of which U.K. $ 1,900 million already committed.

The hatching period of carbon finance coincides with the globalization of trade ...