The transition to net zero is accelerating – but funding remains a key challenge though the markets are liquid for the right projects.
Whether you’re developing a carbon capture, hydrogen, or sustainable aviation fuel (SAF) project, securing investment is critical.
Here’s what you need to know to make your project financially viable.
Understanding the funding landscape
Know what investors are looking for
Investors and banks evaluate projects based on the track record of the team. You need to demonstrate a strong, solid execution history. Build a team that bears the scars of success – experienced professionals who have delivered complex projects before.
Investors will want to see that you understand risk and have a clear strategy for managing technical, commercial, and regulatory challenges.
Key questions to answer:
- Do you have an offtake agreement or are you at an advanced stage of discussion?
- Are you operating in an area of supportive government policy, such as the SAF mandate, which gives confidence to investors?
- Have you identified and managed supply chain risks?
Working with an experienced technical advisory company will help develop a robust technoeconomic model and strengthen your investment case.
Key funding challenges and how to overcome them
Weak Business Case
Many projects look promising on paper but struggle to establish a viable business case.
Common pitfalls include:
- Lack of integration across the value chain and no clear route to market.
- Insufficient understanding of carbon credit strategies.
- Gaps in long-term financial planning.
A mature and tested business model will enhance your project’s attractiveness to investors. Early engagement with an experienced financial advisor will help develop and articulate your business model to potential investors.
Competing for Limited Funding
With multiple projects chasing the same investment sources, a robust market strategy is essential.
- Develop a strong offtake strategy with credible buyers.
- Avoid underinvestment in Development Expenditure (DEVEX)—cutting corners early can lead to failure later and will be exposed during due dilligence.
- Consider industrial clustering to share infrastructure and mitigate project risks.
Working with experienced advisors will help aggregate knowledge in this area and mitigate development risks.
Navigating Investor Expectations
- Financial institutions are shifting their approach to energy project investments – they mature stress tested development plans.
- There are limited high-quality EPC (Engineering, Procurement, and Construction) contractors available, affecting project execution confidence.
- Demonstrating work with credible suppliers and presenting detailed execution plans will reassure investors.
- Build strong partnerships with credible suppliers and offtakers.
- Structure contracts that fairly distribute risk between stakeholders.
- If possible, secure performance guarantees or develop plant availability estimates to reassure lenders.
Understand potential funding pathways
Private capital
Private Capital is essential, particularly for early-stage hydrogen and SAF projects, which remain premium products. Leveraging off corporate net zero commitments to secure investment from industry leaders for example, perseveration of existing business models, e.g. energy from waste, gas distribution networks.
Government Grants & Subsidies
Public funding plays a critical role, especially for first-of-a-kind projects.
Opportunities include:
- The UK government’s Hydrogen Allocation Round (HAR) supports early-stage hydrogen development.
- The National Wealth Fund could back SAF projects where commercial banks hesitate.
- Regulatory incentives—such as the UK’s 10% SAF mandate by 2030—create a supportive investment climate.
Structured Debt Financing
Debt funding is viable for projects with strong offtake agreements and proven technology readiness.
Key Considerations:
- Some SAF projects have achieved up to 50% debt financing, but this requires extensive due diligence.
- Lenders demand clear risk-sharing mechanisms and performance guarantees.
Final recommendations
- Start Small, Scale Gradually – avoid unrealistic jumps from lab-scale to billion-pound investments overnight.
- Keep Initial Designs Simple – overcomplication increases risk and discourages investors.
- Adopt Modular & Standardised Systems – ensures operational efficiency and easier scalability.
Securing funding for a low-carbon energy project isn’t easy – but with the right team, a tested business model, and strategic partnerships, you can unlock the capital needed to deliver a commercially viable project.
How Apollo can help
Apollo has deep expertise in technical due diligence, project risk assessment, and energy advisory.
We can support your funding journey by:
- Conducting due diligence to ensure investor confidence.
- Advising on risk mitigation strategies for bankability.
- Helping secure supply and offtake agreements for long-term viability.
Looking to get your project investment-ready? Let’s talk.