Banks financing renewable projects in the Western Balkans increasingly need to assess not only whether a project can generate electricity, but whether its customers can use that electricity as assumed in the business plan. The EU Carbon Border Adjustment Mechanism (CBAM) is pushing this question into renewable-energy due diligence. The issue becomes more prominent when project revenues rely on exports to the EU or on premium supply to export-oriented industry.
CBAM-linked due diligence beyond generation capability
Traditional renewable-project due diligence typically covers resource assessment, construction, grid connection, permits, operating costs and contracted revenues. An additional layer focuses on the commercial usability of electricity attributes. Where a project expects a premium because it supports a customer’s carbon strategy, lenders need to verify whether the contractual and evidence framework can substantiate that claim.
That verification can involve power purchase agreement (PPA) architecture, metering arrangements, generation allocation methods, certificates and delivery structures. The commercial impact depends on how the premium is supported by documentation and evidence. A PPA may appear bankable from a conventional power-market perspective while being weaker if the carbon-related premium cannot be substantiated.
How evidence structures affect green-premium revenue
In cases where documentation and allocation systems are robust, renewable output can become more valuable to industrial buyers with specific sourcing requirements. Banks may therefore add a carbon and evidence due-diligence workstream alongside legal, technical and financial reviews. This approach is intended to improve visibility over assumptions behind green-premium revenue.
Projects with strong evidence architecture can gain an advantage in financing processes. Industrial offtakers receive electricity products designed around their sourcing needs, while technical, legal and verification advisers take on additional due-diligence tasks. By Virtu.Energy
Financing structures raise questions about end-use of attributes
Renewable projects across Southeast Europe are being financed using combinations of merchant exposure, contracts for difference (CfDs), guarantees and corporate offtake. As these structures diversify, lenders face a shift in the next lending question. It is no longer only who buys the electricity.
The focus becomes whether that buyer can use the renewable and carbon characteristics in line with what the project’s revenue model assumes. This requirement links electricity attribute claims to customer use cases where CBAM-related considerations apply.
