The development of energy production technologies from renewable sources and cost reduction at these facilities has meant they are a technical alternative and economically competitive compared to traditional sources of fossil origin. In the case of the European agricultural sector, the potential of most farms to produce clean energy offers a great opportunity to improve its economic and environmental sustainability. From a social point of view, a change of energy model in the agricultural sector is crucial for meeting environmental objectives, since it is directly responsible for more than 10% of the total greenhouse gas emissions on the continent. However, the high initial investment required by these facilities is slowing its spread among potential users. These financial constraints, coupled with a complex and changing regulatory environment, have caused the almost total paralysis of new facilities for renewable energy production in many EU countries. Be that as it may, the investments needed to change the energy model in the European agricultural sector are on the scale of the hundreds of billions of euros, a figure that is only affordable through direct recourse to capital markets.
On the other hand, technological and regulatory innovations are allowing the introduction of alternative models for financing projects based on the philosophy of bank disintermediation and specialisation in specific sectors. Capital market resources can be channelled towards projects and consumers that would otherwise find it complicated to have access to traditional bank loans or would have to pay very high interest rates. These types of financial instruments, such as consumer loans and certifications in consumer debt collection, when properly designed and applied, demonstrate their ability to finance the development of renewable energy production systems on a massive scale. The adaptation of these types of financing models, based on asset aggregation in a specific context of the European agricultural sector, are dependent on the creation of technical and contractual standards which are compatible with capital market financial instruments. Moreover, these standards must be the result of the widest possible consensus among the different consumers, whether originators, investors or regulators, and they must ensure the protection of the end-users interests; the European farmers.
The promoters of RESFARM have produced a capital market financial instrument, which is specifically designed to introduce renewable energy production systems on European farms. This instrument, once implemented, will serve as a reference for promoters and investors and would enhance necessary confidence in these kinds of assets. Another important element, which has been inspired by the RESFARM project, has been the need to provide agrarian organisations with the necessary tools to advice farmers correctly on the technical and economic opportunities of renewable energy systems.
