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Adjusting of the Tier One Demand maybe can become the most important tool in Energy Finance worldwide. Certainly in by Basel II ( dominated times. Basel II demands higher Tier One levels due to dynamic/specific credit risk levels for several types of more risk attached credit. If all the described Energy Finance tools are used the Tier One demand for energy investments could be lowered to zero, if some are used they could be lowered to specific risk adjusted levels. Basel III needs to address the Tier One demands of energy investments very specific and in the interest of both economic recovery and energy transition as fast as possible (within months and not within years) and as good (right risk adjustment) as possible. The fuel-less characteristics of renewable energy makes it a pure capital based model. The absolute demand for energy insurers amortization and interest payments. A request for this is send to the Chairman of the Basel Committee (Sir Wellink). It's clear that the different energy finance concepts lowers the risk for the financier severely, and that a cumulation of them can lower the risk to zero. If the TierOneDemand is lowered the IB money creation can compensate somewhat the lack of economic activities driven money creation that is present due to economic decline. The 'Energy as TOD' concept, is combined with the 'Energy as IB' concept, combined with the 'Energy as Gold' concept, combined with the 'Energy as QE' concept, if based on the 'Energy as Output', 'Energy as Collateral' and 'Energy as ROI' concepts can deliver both economic recovery and energy transition the same time. Energy as TOD is a concept capable of generating a massive energy transition investment wave.

Author: Gijs Graafland

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