Managing Risks in Cross Border Energy Projects in Emerging Markets
Managing Risks in Cross Border Energy Projects in Emerging Markets

Summary/Abstract: Clean and renewable energy projects are increasingly important to meet the growing energy needs in the world. These projects are also critical for environmental reasons and as part of the battle against climate change. A large part of clean energy sources in the world are located in emerging market economies. Investors engaged in cross border investments to emerging markets are often faced with higher risks than those investing in high income OECD countries. Higher risks in turn reduce capital flows to emerging markets. At the same time clean energy projects tend to be large, capital intensive and long-term. An additional complication is that energy projects often require partnership between the public and the private sectors i.e. public private partnerships (PPPs). This article discusses PPPs in the energy sector in emerging market economies. The focus is on cross border investments from small states where Iceland is selected as a case for discussion.

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