ENHANCING THE BANKABILITY OF GREEN ENERGY PROJECTS IN KUWAIT

Objective: The purpose of this research paper is to empirically analyse how conventional economic and financial metrics influence investment in solar energy projects in the state of Kuwait. The empirical analysis is based on 13 years of data covering the period from 2010 to 2023. Theoretical Framework: This literature review examines the factors influencing bankability and explores strategies to enhance financial viability. The authors of the research designed a financial model to produce some necessary financial metrics. Method: A multiple linear regression model is used to study the relationship of total solar investment in MWh and six independent variables, such as Weighted average capacity factor, WAAC weighted average cost of capital internal rate of return (IRR), Payback period, and PVOUT. Along with statistical tests such as ANOVA and OLS regression, used to evaluate the strength and significance of the relationship between the dependent and independent variables. Results and Discussion: The result of the analysis identifies only LCOE as the only marginally significant factor influencing investment in solar energy projects in Kuwait, with a negative coefficient (-454.79) and a p-value of 0.0822. Other independent variables, including the weighted-average capacity factor, WACC, payback period, and IRR, are shown to be statistically insignificant, indicating limited influence on investment decisions. Research Implications: This study has limitations that should be acknowledged. First, these findings show that investment in solar energy relies especially on conventional economic and financial investment metrics which are not enough to rapidly advance renewable energy development in Kuwait. Proactive public policy with attractive tools that stimulate investor confidence and promote a sustainable energy transition is not included. Originality/Value: This study provides original empirical evidence on the economic and financial factors influencing investment in solar energy projects in the State of Kuwait. As a relatively underexplored topic in the renewable energy finance literature, particularly within the context of Kuwait.