Project facilitation: The recipe to enhance bankability of SAF projects

The four pillars for de-risking projects under Finvest@ETAF.

Aviation and freight play a vital role in the global transport sector, connecting people and moving traded goods from and to different places in the world.

Yet it remains one of the most difficult sectors to decarbonize.

The sector accounts for around 2 percent to 3 percent of global CO2 emissions, according to the International Civil Aviation Organization’s overview on aviation and climate change, and emissions could rise further as air traffic continues to grow.

Liquid aviation fuels produced from renewables or waste-based feedstock referred to as sustainable aviation fuel (SAF) can be used in existing aircraft and infrastructure.

SAF is widely recognized as a key pathway for reducing aviation emissions, particularly for long-haul flights, delivering lower lifecycle greenhouse-gas emissions—up to 80 percent compared to conventional jet fuel.

Despite this potential, SAF deployment remains limited.

Its high initial set-up and production costs, as well as supply constraints, pose challenges to financing.

While policy ambition and technical understanding of SAF are progressing, financing implementation and scaling-up remains a key bottleneck.

Compared to conventional renewable energy projects, SAF projects face additional hurdles such as first-of-a-kind risks, certification requirements and long-term offtake uncertainty.

For many SAF projects, these challenges can translate into financing and investment-readiness constraints.

Addressing the financing gap

As a response to these financing challenges, the International Renewable Energy Agency (IRENA) in cooperation with ICAO established the Finvest@ETAF.

This initiative applies the project-facilitation approach of the already existing Energy Transition Accelerator Financing platform to SAF projects.

Finvest@ETAF provides a structured entry point for translating SAF ambitions into investment-ready projects by connecting developers with financing and de-risking support under the ETAF platform.

ETAF itself has brought together 14 partners and more than $4.15 billion in pledged capital to support clean-energy projects.

It provides the foundation on which Finvest@ETAF facilitates SAF financing through bankability analysis, advisory and technical assistance, as well as access to financing solutions made available via ETAF partners.

The perfect ‘marriage’ to create a pipeline of bankable projects

Finvest@ETAF builds on several years of analytical work by IRENA on bioenergy, SAF and hard-to-abate sectors, which lays the scientific foundation for SAF sustainability, feasibility and deployment pathways.

Together, IRENA and ICAO combine and complement each other’s institutional strengths.

While IRENA focuses on project facilitation, bankability assessment and engagement with financing partners, ICAO contributes its expertise on aviation-sustainability frameworks, certification and global policy instruments such as the Carbon Offsetting and Reduction Scheme for International Aviation, detailed under the CORSIA framework.

The initiative works by providing a dedicated portal on the ETAF platform, specifically tailored to the aviation sector’s technical, regulatory and market needs and characteristics.

Projects supported under Finvest@ETAF are guided through a structured facilitation process, from initial screening to engagement with potential financiers.

Depending on a project’s level of readiness, support can draw on a set of complementary de-risking instruments made available through ETAF partners.

Taken together, these instruments are intended to help address key risks that can limit investment in early-stage SAF projects:

• Blended finance combines public and private funding to help lower project costs and mitigate financial risks, improving SAF project bankability and investor interest.

• Equity investments provide early-stage capital to address the high upfront costs of SAF facilities, reducing reliance on debt and supporting project scalability.

• Guarantees and insurance protect against risks related to revenue uncertainty, technology performance and supply chains, including political, credit, feedstock and engineering, procurement and construction (EPC) or operations risks.

• Technical-advisory services support project proponents in improving proposal quality, strengthening financial and commercial structures, and addressing key readiness gaps.

Preparing for scale

Global policy momentum around SAF continues to grow, with initiatives such as the European Union’s ReFuelEU aviation regulation and the United States’ SAF Grand Challenge signaling increasing demand.

Turning this momentum into deployed capacity will depend on coordinated action across governments, industry and financiers.

Within this context, a high-level panel was organized at IRENA’s 16th Assembly Jan. 12 to identify concrete areas for cooperation across governments, industry and financial institutions.