Northern European countries should work together to raise the credibility of renewable energy project to investors, according to the president of the Nordic Investment Bank.

Speaking at a globalisation forum in Copenhagen, Johnny Akerholm said that “green growth is more than just energy projects”.

“It’s a question about overall economic growth, and how to maintain that growth based on environmentally sustainable principles. This requires the development of new green industries and technologies, as well as the transformation of the existing sectors in a more sustainable direction.”

But he said that the main problem for ‘green’ investment was that “the economic considerations at the macro level are not included on a micro level, where the actual financing decisions are taken. So, when looking at the energy sector, it is generally more profitable to invest in ‘brown’ production than in green.”

He said a good example of this was wind energy. “These investments require subsidies or prices support in order to be profitable. From the financier’s point of view, it is not attractive to provide long-term financing for something that is relying on subsidies which can turn out to be short term.”

He said the attractiveness of green energy projects in Northern Europe would be enhanced if Norway, Denmark, Sweden, Iceland and Finland worked together on a “joint vision and timetable” for green energy projects that was “realistic enough to be credible”.

“This would help to create a large enough market for necessary development work, it would maintain competition between actors and avoid the taking of a position on technical solutions,” he added.

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