How to foster sustainable finance for energy transition?

The purpose of this study is to review the current policies related to sustainable finance, to review the incentives used to promote the generation of electricity from renewable sources and to give some insights on how to redirect capital flows towards energy transition. This work is focused on generation of electricity, and not energy sector as a whole. First, this work comprises a review of the policies the European Union has developed to achieve climate neutrality, more specifically policies related to energy transition and sustainable finance. It also covers the investments in renewable sources for the generation of electricity as well as the changes in the electricity mix across time and the barriers to investing in renewable energy. To analyze how renewable energies have been incentivized, this work includes a review of the support schemes used, and in addition, the review of the incentives used by four countries and its changes across time. Moreover, a quantitative analysis is done and is focused on the Feed-in Tariff mechanism, which is a policy tool designed to promote investments in renewable sources by providing a remuneration guarantee, and European Investment Bank loans.