Bankability or bankability is a classification in which different financial agents can assess the scale of risk when investing money in companies and projects.
The bankability analysis is carried out based on different parameters and shows the company's financial indicators that prove whether the company is financially healthy, whether it can honor its commitments within a given period and whether it is a highly profitable company.
All of these indicators show investors how solid a company is and also help to improve the supply of credit and interest in operations.
Bankability and the solar energy sector
In the solar energy market, bankability It is something even more important and profound. Among equipment manufacturers, whether modules or inverters, it is extremely important to adhere to this Indicator, which is why PVTech carries out a study involving financial data and production capacity, bringing a scale between C (high risk) and AAA ( high profitability, the famous triple A).
This classification greatly helps the solar industry to provide guarantees to its investors in several aspects. Firstly, bankability indicates whether the company can deliver the agreed order, ensuring the financial planning of the project. Secondly, bankability guarantees good credit negotiations for large projects.
Thirdly and finally, and most importantly, bankability attests to the company's ability to meet equipment warranties. This last one is very specific to the solar segment, as projects use equipment with a life expectancy of 25 to 30 years. For an investor, it is extremely important to have confidence that their supplier is able to maintain healthy and profitable operations during this period.
Bankability will increasingly become a crucial factor for negotiations in Brazil, since the expansion of large power plants has been growing rapidly in the market and also the increase in investors involved in the renewable energy market. All this combined with global economic instability makes it increasingly important to look at other variables and not just the CAPEX of the projects.
