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Working Paper | An Integrated Control Tower: Coordinating and Unlocking Investment Capital for Clean Energy

Soh Young In
Ashby H. B. Monk
Raymond E. Levitt
2018

As recent history highlights, there are numerous challenges in bringing novel energy technologies from the lab all the way to the global energy marketplace. But one challenge in particular has proven particularly intractable recently; the lack of financing for clean energy entrepreneurs. In this white paper, we propose a new coordinating platform that can facilitate an intelligent information flow over the entire clean energy development cycle. Through this platform, we expect that new capital inflows can and will increase as we better allocate the risks (and thus returns) of clean energy investments to the parties that can shoulder them. We develop a blueprint of this integrated control tower, which is a multi-strategy vehicle that better aligns risks with investors and thereby facilitates high investment returns. It will offer a tailored path to all agents participating in this sector, just as an air traffic control tower guides planes on different glide paths depending on their specific characteristics and objectives (destinations). The new control tower will simultaneously coordinate three core intermediary functions: (1) an anchoring institution that offers small amounts of priming capital that can even take a first-loss position; (2) a financial intermediary that raises capital, at-scale, from various funding sources and provides equity and debt capital to companies maturing commercially; and (3) a trusted infomediary that provides reliable and objective information about clean energy companies or projects in a highly transparent and trustworthy manner, and help long-term institutional investors (LTIs) to mobilize their capital into clean energy ventures while meeting their unique investment criteria. The control tower will, we hope, lower barriers to clean energy funding and optimize access to available financial resources by directing “investor traffic” towards the most efficient and aligned investments products and opportunities.