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High Interest Rates Make It Harder to Unleash Clean Energy Finance

Renewables came into their own during a long period of low rates. That’s over, but lenders and borrowers can take steps to soften the impact. 

Attendees arrive at the COP27 climate conference in Sharm El-Sheikh, Egypt. 

Attendees arrive at the COP27 climate conference in Sharm El-Sheikh, Egypt. 

Photographer: Islam Safwat/Bloomberg

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At COP27 this week, negotiators and executives will address the urgent need for trillions of dollars of climate finance to help the world through what the UN organizers call a “polycrisis era.” On Wednesday, the summit’s Finance Day, there was a session devoted to lowering the cost of green borrowing. For good reason: Current financial conditions, and interest rates in particular, have changed drastically from the period when clean energy came into its own.