SWF AND THE PPP
Think there could be 5 interesting little sections in paper 1 and you can use bits of this document to write them:
1. PPP (150 words)
2. SWF (175 words)
3. Risk (100 words)
4. Technological and institutional learning (100 words)
5. Cost of capital for funding renewables (100 words)
For 2 you need to:
1. Say what SWF are
2. Being used to diversity into renewables (need a better ref here than the Master thesis by Norwegian person for KSA)
3. SWF being used in conjunction with PPP
4. Weigh arguments for and against – thing about not a good idea
For 3:
1. Characterize risk for renewables
2. Explain implications of risk for SWF and private investor, which are the risks they worry about and why, how do they manage this risk together (in theory)
For 3 here we talk about cost reductions and risk reductions: key drivers technological learning and institutional learning.
Explain for solar how much is each. Which is more important, which for KSA? Jubinger very relevant. Link this back again to risk.
For 5 then reflect on the WACC, does this fall if the risks fall, theory says it should. What are the implications in theory for the PPP and the different enteties. Are we seeing this in the KSA. We tease out the factors that affect the WACC locally, show the results, discuss these and then come back at these issues in the discussion.
