Project Finance, Unlocked (Part 4)
The Bankability Unlock
Happy Tuesday! In the spirit of the holidays, you could say this article is a “gift” - a playbook on bankability. Enjoy!
Every climate technology reaches a moment of truth. The prototype works. The pilot runs. The first customers lean in. But when it’s time to raise real project finance, everything slows down.
This isn’t because lenders lack imagination. It’s because they fund what they can trust. And trust comes from structure.
Solar and wind didn’t scale because they were initially the cheapest. They scaled because they became predictable.
The good news is that any emerging climate technology can follow the same path.
Bankable Offtake
Turn volatility into predictable payments.
What matters
The product you sell
The contract length
The price path (i.e., fixed price, fixed price + escalator, indexed price)
The counterparty
What lenders look for:
Details on the delivery of the product
Credit support that protects cash flow
Design tip:
Start by deciding exactly what you’re selling. That choice shapes every downstream decision. When the revenue product is clear, the engineering and the financing can snap cleanly into place.
Bankable Construction
Engineer construction so the schedule holds, the budget doesn’t move, and the DSCR stays above the line even when stress hits.
The big three
Fixed price
Date certain
Liquidated damages that make you whole when the schedule or performance slips
Additionally, set a clear scope, map permits to schedule, and keep one party accountable.
Design tip:
If your technology is new, wrap it in a proven balance-of-plant so the EPC can stand behind it.
Bankable Equipment & O&M
Make performance predictable.
What lenders want
Warranties that protect cash flow
Clear fixes when things break
Reliable service
Spare parts on hand
Insurance that fills the gaps
Design tip:
Make sure the risks that cause real cash flow pain are the ones you guard against.
Bankable Data
Make the project’s performance easy to see, understand, and verify
What matters
A tag map that ties each sensor and metric back to the model, so lenders can trust the numbers
IE-aligned acceptance tests (specifications) and/or certifications
Clean monthly reporting (i.e., output, downtime)
Design tip:
Standardize data early so every project looks the same. It becomes the foundation that lets you scale fast later.
How Debt Gets Sized
Model the downside
Size debt to cover DSCR in the downside case
Add reserve accounts as a buffer
Lock the waterfall so every dollar flows in a fixed order: operations first, lenders next, equity last
When the cash flow becomes steadier, lenders become more comfortable, and leverage naturally increases.
The Standardization Flywheel
Industries scale because processes become repeatable.
Solar took off when every project started using the same playbook. Once the pattern snapped into place, capital rushed in.
You can build that same flywheel:
Standardize your offtake
Standardize your construction
Standardize your warranties and data
Do that, and every project gets easier. Lenders trust you faster. Money gets cheaper. And you shift from a promising technology to a bankable platform.