Overview

Project-specific finance is a critical piece of the fossil finance landscape, with domestic and international financiers pushing gas expansion. However, market and political shifts are slowing some final investment decisions. 

Project-specific finance for liquefied natural gas (LNG) terminals and gas-fired power plants is an opaque but critical factor in the fossil finance landscape. While finance and reporting structures differ heavily by country, equity investment, debt investment via loans or bonds, and in particular the announcement of a final investment decision (FID) indicate concrete movement of a fossil gas project towards construction and completion, while delays in financing can indicate a project’s vulnerability. 

In South, East, and Southeast Asia, a survey of the state of project finance for in-development infrastructure reveals high involvement of domestic financiers as well as international investment. State investment plays a key role in the development of many gas-fired power plants, as in Vietnam and Taiwan. Political and market instability has resulted in many projects becoming indefinitely stalled or shelved, as in Bangladesh and Myanmar. 

In Australia, most gas and LNG projects remain in early stages, with financial futures uncertain outside of some Australian government and commercial bank funding. On the North American front, financing from Mexico’s Federal Electricity Commission (CFE) is driving gas-fired power plant expansion, while, in Canada, a significant percentage of planned buildout is proposed captive power for AI data centers. Both Mexican and Canadian LNG terminals, while slow to progress, have seen significant private investment, with some Mexican LNG export terminals projected to supply to Southeast Asia. 

Throughout the rest of Latin America and the Caribbean, project-specific fossil fuel finance varies greatly from country to country. For example, in Brazil, many long-stalled projects appear to be on the brink of revival following recent reserve capacity auctions, while in Argentina most projects are shelved following government cancellations. Some Caribbean countries, such as the Bahamas and the Dominican Republic, have secured financing for fossil gas and LNG projects, while others such as Aruba have seen fossil gas projects stalled after lack of financing and forward progress. 

Methodology

Frequently asked questions