Financing Innovation Powers Renewable Energy Growth in the Black Sea Region

At Energy Week Black Sea 2025, experts highlighted a defining trend in renewable energy: the growing reliance on innovative financial instruments and strategic collaboration between public and private sectors. Speakers underscored the importance of Contracts for Difference (CfDs), Power Purchase Agreements (PPAs), and credit enhancements in enabling investment, overcoming market volatility, and navigating regulatory complexities.

Unlocking Investment with CfDs and PPAs

Marius Cara, Head of EIB Group Office in Romania, described CfDs as a game-changer for renewable energy financing in the region. “The CfD scheme in Romania has already enabled large-scale investments, allowing the EIB to co-invest in transformative projects like the 400 MW wind farm at Pestera,” he stated. However, Cara also noted the need for flexibility, introducing the EIB’s pilot PPA guarantee scheme, which will provide critical de-risking for small and medium-sized enterprises entering the renewable energy market.

Meanwhile, Maia Melikidze, Executive Director at GREDA, revealed how Georgia is transitioning from CfDs to PPAs. “PPAs provide longer-term certainty and greater flexibility for investors,” she explained, adding that Georgia’s first two CfD auctions received applications far exceeding capacity, indicating high investor interest.

De-Risking in Unstable Environments

In Ukraine, the challenges are acute. Despite the ongoing war, Dr Oleksiy Feliv, Managing Partner at INTEGRITES highlighted significant progress, including over a gigawatt of new renewables added to the grid in 2024. “Ukraine has shown resilience, but scaling projects depends on political risk insurance and innovative financing like a proposed de-risking fund,” Feliv said. He explained that war and inflation have raised project costs, necessitating guarantees to attract both domestic and international investors.

Olga Sclovscaia, Regional Head Central & Eastern Europe and Central Asia of the Multilateral Investment Guarantee Agency (MIGA), shared insights into de-risking strategies that have been effective in high-risk regions. Citing examples from Egypt and Albania, she described how MIGA’s guarantees have enabled projects to secure better credit ratings and cheaper financing. “In Romania, similar instruments can lower the cost of public investments and foster private sector involvement in critical infrastructure like the Black Sea undersea cable,” she suggested.

ProCredit Bank’s Head of Renewable Energy Center Vassil Todorov pointed out that addressing risks is not just about innovative financing but also strategic planning. “We’ve supported over a gigawatt of renewable capacity across the region by tailoring solutions to project size and investor needs,” Todorov said. He emphasised the role of smaller-scale projects and urged for the inclusion of flexible support schemes that ensure even mid-sized and small projects can access funding.

Collaboration and Regional Growth

The panel also examined the broader regional implications of renewable energy financing. Todorov highlighted Romania as a leader in integrating diverse financial mechanisms like CfDs, PPAs, and merchant models. “Support schemes must coexist to cater to a variety of investor profiles and project scales,” he stated, noting that this balance is essential for sustainable growth.

Paving the Way for Energy Independence

Looking ahead, the Black Sea region has the potential to become a renewable energy powerhouse. Cara highlighted Romania’s goal to achieve energy independence by 2028, while Melikidze noted that Georgia has only utilised a fraction of its vast hydropower resources. Both speakers stressed that realising these ambitions will require addressing grid limitations, regulatory hurdles, and the availability of affordable financing.

“Public-private collaboration and the strategic use of financial tools will be the cornerstone of our success,” Sclovscaia concluded.

Energy Week Black Sea 2025 showcased not only the challenges but also the innovative solutions driving the renewable energy transformation in the region. With strategic financial partnerships and effective policy frameworks, the Black Sea countries are poised to lead the way in sustainable energy development.