Shubhda Kaushik, Alternative Energy Company: Bankability and The Decisive Decade

In this episode of The SAF Podcast, Oscar is joined by Shubhda Kaushik, managing director & chief executive officer, Alternative Energy Company, to explore what it really takes to move sustainable aviation fuel projects from ambition to final investment decision. Drawing on experience at Standard Chartered, Bain and McKinsey and Maersk, giving her a rounded perspective across finance, strategy and commercial practicality. Shubhda explains why capital for energy transition projects is not scarce, but selective — and why bankability must be built in from day zero.

The conversation also dives into Shubhda’s new book, The Decisive Decade - 2026 Volume I: A Practitioner's Manual - What will it take to win on bankability in the next phase of energy transition.

We explore the core bankability framework behind it: revenue certainty, infrastructure access, execution capability and risk allocation. 

This is just volume I, so if you enjoyed this stay tuned for volume II for a check in on the energy transition's progress.

This is a practical discussion for SAF producers, airlines, investors, lenders and anyone trying to understand why so many projects look promising on paper but struggle to reach financial close.

This episode gives you a great introduction to what is explain at length in the book, which you can find here: https://www.amazon.co.uk/Decisive-Decade-Practitioners-bankability-transition/dp/B0GZHQR25T/ref=sr_1_1?crid=3MEKZBXCEA3ZB&dib=eyJ2IjoiMSJ9.ikEBk10suF88vWdw1KH_CcBNnz9j6PniHNHHDWsie_fENicXTm3b2WClyMPMQ4pLvgKL6EJah0NMTppyB8GMRvqW_nJ3SG99vgYueNEUz1I.rZjcjiPvwirmc57l23MD1XG5HYaUI2osS2EXQErFT6I&dib_tag=se&keywords=the+decisive+decade&qid=1778142508&sprefix=the+decisive+decad%2Caps%2C293&sr=8-1

Transcript

Welcome And Today’s Focus

SPEAKER_02 0:10

Hello and welcome to another episode of the SAF podcast. And I'm very excited this week to be joined by Shubda Kalshik from the Alternative Energy Company. And we are going to be digging into Shubda's background, how she ended up working in this field, what the Alternative Energy Company does, and also we're going to dedicate a large portion of this episode to Shubda's new book, which you will be able to get now, which is called The Decisive Decade: What Will It Take to Win on Bankability in the Next Phase of Energy Transition. And this is volume one. So Shubda's going to be doing this all over again in about 10 years' time. Shubda, thanks so much for joining us. How are you?

SPEAKER_01 0:59

Hey Oscar, I'm good. Super excited to be talking to you right now.

Shubda’s Path Through Energy Finance

SPEAKER_02 1:04

It's great to have you. I know you've had a very busy couple of weeks getting your book to publication. So, but I'm going to park the book for now. We're going to come back to that. So before we get into that, what is your background before alternative energy company and your career up to that point?

Why AEC Exists And What’s Different

SPEAKER_01 1:29

Sure. So I will start from the start. I trained as a civil engineer at IIT. I did my MBA in finance and strategy at Excelare, and have spent the last 15 years in the energy transition field. I um basically have spent 15 years across India, Southeast Asia, Denmark, and now the UK on the projects and with the institutions that sit at the center of energy and infrastructure economy. The work moved me through, I would say, three key verticals or three vantage points. One would be project finance, which started at Stratar Chartered Bank, where I learned what capital actually requires before it commits. Then I did strategy at McKinsey and Bane, where we worked on the questions, the ones that sponsors and investors ask before they decide which projects to invest in. And then in the industry, I spent time with Reliance and Mersk and other developers building first-of-a-kind green molecule assets. So I can basically say that my last 15 years were split equally in three categories. One would be project finance at Standard Chartered Bank, one would be strategy consulting with McKinsey and Payne, and one would be developers' experience with Reliance and Mersk. And I think one common red thread was energy transition and strategy to finance such assets, which gave me a unique perspective and from the three different vantage points, right? Which which I have also tried to incorporate in my upcoming book, The Decisive Decade, which you just mentioned, and which also is the founding principle for AEC. We try to bring along all these three different perspectives whenever we work with our clients.

SPEAKER_02 3:28

So tell us a bit about AEC. When did that come about? When did you want to sort of move into the advisory position that you now hold? And what is the unique offering that AEC has versus because there's many advisors across the sustainability piece? Bankability is such a common trend across the globe right now, and lots of people are working on it. So, what is the unique offering that AEC has or perspective versus others?

SPEAKER_01 4:03

Um, good good question. And I think you asked me two questions here, right? One was that when did I decide to build AEC? And the second one is what is unique about AEC. I will take uh the second question first, which is the which is about our unique offering. So AEC was built on a specific observation, which is which is what I which is what I experienced in every market I worked in across India, Southeast Asia, Europe, and the UK. There was a pattern uh repetition, which was people having strong pipelines, there were capable sponsors. The capital is available. It is it is not that it is scarce, it is selective, and I will come to that point later at some point of our discussion. But the availability of capital is there, but still there was a persistent gap between projects that are on paper versus projects that actually reach financial closure, which essentially decides will the projects actually get built. And you and I both know a long list of those projects that exist uh today and uh in the market. Uh, and the institutions that exist to advise on transactions, which you which you are right, there are other institutions that exist to advise on such transactions, are structured around individual deals. Um, I have worked with such institutions in the past and they take deal-by-deal perspective, they give feedback in a yes or no, that off-take is there or off-take is not there. So please go back and get the off-take contract signed, and then we will um you know advise on the transaction, on the capital structuring of the transaction. So this is the financial advisory side of the firms and the firms that exist on helping uh the project development phase, they don't necessarily come into the capital structuring part of the things. I mean, maybe there are some and no shade to the ones who are doing specialized work in one part of the value chain that is their uh that is their unique value proposition. But I felt what was missing was a platform that could think about bankability as a discipline that runs from project origination through to capital commitment until the FID is uh achieved. And I believe AEC is that platform. So that I feel is the unique value proposition. And like I said, the the experience of having project finance background plus uh systems thinking from the strategy companies plus actual developers execution background. This this is what I feel is something that I want to make sure that all future hiring in AEC uh respects uh these three aspects in future talent. And yes, it is difficult to find all three in one, so we will make sure that the talent that gets hired also gets trained in all these three aspects.

SPEAKER_02 7:08

And when did AEC start? When did you decide that this needed to this needed to happen for the industry?

SPEAKER_01 7:17

AEC um officially got launched on September 22nd in 2025. So we are barely eight months old. Um, but I think the idea to have this firm or this kind of platform was always there in my head, and I wanted to, I wasn't sure on when I would do it. Yeah, I felt like the timing is right. We are at a unique juncture. Um, we are at a critical point in this journey where we need this um this sort of platform, and the timing just worked really well.

SPEAKER_02 7:54

And how have you found the first eight months? Has it well is it has it been what you expected it to be, or has it been slightly more challenging than you potentially realized when you when you set out?

SPEAKER_01 8:09

Honestly, I um it it is more than what I expected it to be. It is um I'm enjoying it. I'm loving it uh so far. Uh it has been intense. Um, I have barely slept over the last few months, but I am not complaining. I'm enjoying it. Rather, the only thing that I regret is I wish I had started a little earlier.

SPEAKER_02 8:36

And who are the the clients that you're looking to work with? Are you looking to work with across the spectrum, primarily on the production side, the finance? Who are you who are you targeting?

SPEAKER_01 8:47

Yeah, um, so we are targeting three constituencies. Uh the mandates that AEC works on are also split by three. I don't know why we have everything by three, but probably that's the consulting mindset, top three or top five or whatever. Anyway, so there are three constituencies. Uh, one is your sponsors, developers who are actually developing the capital-intensive green molecule assets and uh not just green molecule assets, but also we are advising clients which have vertical, vertically integrated uh assets, right? So they build their own uh power uh renewable power projects as well in the vicinity of these assets. So the developers are one who need to structure these projects in forms that capital can commit with conviction. Second is we are also actively working with a couple of investors, PE funds, and um not so much with lenders, but they come into picture at the time of financial closure. Uh, but the second second constituency is investors who are evaluating these projects who need a view on bankability that goes beyond what the initial teaser or brief provides. And the third is the institutions. There are there are people that I worked with probably like now eight years ago when I was in the banking who are uh who are in development finance uh finance institutions, uh multilaterals or MDBs or ECAs who want to deploy capital, who need but they are very risk-averse, as you can imagine, and uh they they take very long time to uh do their due diligence, and rightly so. Um, so that is the third category because these are the institutions that once they start deploying capital into these projects, it really makes the case uh super bankable for commercial lenders as well. And uh the only thing is that a lot of these MDBs and ECAs and multilaterals haven't yet invested as much as they should. And actually, there are probably one or two who have um in the green molecules assets. So these are the three three key uh clans or target clients we are we are working with.

SPEAKER_02 11:07

So the decisive decade is essentially a book which you told me just before we started recording it's 277 pages long. So we I think we're gonna get into well, yeah. First off, why would you decide to write a book that's 277 pages long when you can get clients to pay you for expertise that would presumably cost a lot more than the cost of a book?

SPEAKER_01 11:37

You know, uh that question actually came to my mind that am I cannibalizing my own business by writing this book? And I discussed this with my board members and advisors that uh uh I think I'm giving away a lot.

SPEAKER_02 11:50

All the trade secrets.

SPEAKER_01 11:52

Um and then uh the my one of my um board members uh said that any client who thinks that he can read your book and do the job is probably not your target client. Uh you know you would want to work with a client who understands the value that AEC brings to the table and not just a book uh can replace it. Um and that was like, yeah, that's that's true. And number two, if there are clients who cannot um uh afford to hire AC for their project, but can still leverage some of the insights from the book to to help their projects, um, I think I would love that. Um so the and the third thing is I mean, it has been inculcated in me from the very from my childhood days and also through the firms that I worked with, like McKinsey, that knowledge shared is never a waste. I mean, it should be it should be available to everyone. So um and the 277 pages bit, I did not intend to make it this long. I was actually going to I I I used to write a lot for alternative perspectives, which is our publishing arm uh for AEC. Um, and I was basically writing essays, and I thought that okay, let me just combine all the essays in one book. Writing a book was always part of the plan. Um, but again, I think the timings uh were never decided, or I never knew that it would happen so soon. But I was then start writing those essays and then I was combining them, it turned into a 150-pager book. I wanted to add some more frameworks, turned into a 192-page book, wanted to add more case studies and tools, and then yeah, now we are at 277, but it has a lot of um key technical terms that you use in project finance. Um, so it is a mix of a story, a storyline that takes you through seven, seven episodes uh of the macroeconomic things that are happening or will happen in the next 10 years. And then there's an execution layer of okay, if this happens, then what's the right thing to do? And the third layer is the whole the bankability framework, which is AEC's proprietary bankability framework that we introduce in the very beginning of the book to also educate the readers before they jump into the deeper details.

SPEAKER_02 14:25

Yeah. It kind of reminds me of school days when you had a textbook and lots of people would think they could do the exam by just reading the textbook rather than going to lessons. And a lot of the time that didn't necessarily work so well for people, although there are always those annoying few, and I'm everyone knows about these guys that didn't do anything and read the textbook and somehow did well. But I'm I'm not gonna say that that will go well for people developing SAF projects or working on SAF projects.

SPEAKER_01 14:56

It would definitely help, and I think they will be more informed when they will actually go into the conversations with their advisors and bankers. Um, they would definitely be much more um informed than they were before. And honestly, if they if this book actually gets them to achieve the finish line without any intervention from a from an advisory firm, I would feel very proud of it.

SPEAKER_02 15:23

You mentioned the bankability framework at the beginning. Do you want to take everyone through that and what you basically consider that framework to be and the critical components that comprise that?

SPEAKER_01 15:37

Sure. Uh in the book, by the way, the introduction chapter talks about the bankability framework. It introduces the bankability framework, and in chapter three, uh the next capital logic, uh, the longest chapter of the book, uh, we deep dive into the bankability framework for I think almost 40 pages.

SPEAKER_02 15:57

Uh so we have the average version, not the 40-page version for the for the purposes of this podcast, please. Um it might be quite long. Is there on that? Is there an audiobook version? Are you gonna read it?

SPEAKER_01 16:13

I um not think I haven't thought about it. There is going to be a Kindle version. Uh, I'm launching the uh hardcover book first, and I genuinely didn't want to launch a paperback because I'm on I love books, and I felt like I don't want a paperback version of this one, I want to keep it hard case cover. Um, but uh coming back to your question, I will try to synthesize your bank my bankability framework in one minute. Uh so there are four conditions basically which we believe uh determines whether a project becomes bankable at scale. One is revenue certainty. By the way, revenue certainty is different from revenue uh forecasts, right? So revenue certain you can make projections and you can basically say this is what revenue and cash flows will look like. But revenue certainty, when I say that, I mean a legally enforceable structure that determines what the project will earn, on what terms, and against which counterparty over a tenor that matches that is actually longer than the debt tenor. So it is about number one, visibility on the cash flows, number two, predictability of those cash flows, number three enforceability or legal enforceability of those cash flows, and which basically determines overall certainty of those cash flows. Um, so that's one. Um, the second thing, and then of course, revenue trickles down. Uh, you know, you remove the costs, and then there are uh then you are the CFADs, which is cash flow available for debt servicing, and then your there is FCFE. So it should be cash flow certainty, but I wanted to make it a little bit more basic, starting from revenue certainty, because uh the the the details come into the execution capability, which is the third part of the bit of the framework. But let me go to the second one first, which is infrastructure access, which is whether the molecule, the electron, or the product that we are producing can actually move from the asset to the market to simplify the whole infrastructure access bit. And the third is execution capability, which is whether the team and the supply chain can build what has been promised on the time and within the budget, which includes your feedstock sourcing, your transportation and logistics of the final product, which uh construction uh timelines and EPC execution, the contracts that are there with the technology providers. I was just talking to a developer, and we were like, oh, we are building a methanol project, we we will get the technology from this guy, and the uh the construction timeline is two years, and then we realized that actually the key bottleneck is that the technology cannot be uh available at the project location for the first 22 months. So, how can we make sure? And then, you know, after the technology is there, you need another uh eight, nine months for building the asset, like in including it in the in the asset, and therefore, and these are small things, you know, you think, oh, technology, sign a contract, get the technology, execute on the project, but all these interlinkages of the timeline. So that basically builds your execution capability, and then the fourth one, which is essentially allocation of the unmitigated risk. So there are a lot of risks that you mitigate, and we have a risk mitigation and allocation of risk framework in the book as well. Like who is the right party, who is the right counterparty to handle that risk. So who should sit with the technology risk, but who should sit with the building the integrating the technology into the project risk, which is your EPC contractor, right? Um and then there are risks that do not that cannot be mitigated by the project company, the sponsor, the lender, or any of the parties that are including uh that are there in building a project, which are uh geopolitical risks. For example, what is happening in the street of home risk, that some some risks that are exogenous in nature, that are unpredictable, and what happens when that happens. So I will I will deep dive on it more, but I think you should read the book, Oscar.

Revenue Certainty And Offtake Reality

SPEAKER_02 20:29

I am I'm going to I'm I'm gonna ask you to deep dive on each of those slightly more. I'm not gonna ask for the the full thing because I think you shouldn't we can save that for the book. But on the revenue certainty piece, and I'm gonna we're gonna we're gonna go into each of those four separately.

SPEAKER_01 20:47

Okay.

SPEAKER_02 20:48

A lot of the issues around revenue certainty is getting agreements in place that have a price floor, uh, because airlines don't want to be caught out in year eight of their off-take agreement with a price floor when the price of SAF has come down below that price floor, and within that nature, the the these deals can become incredibly complex, and what necessarily works for the airline and is very, very seldom what works for the producer a lot of the times and what they need. So yes, it's very important from a bankability perspective, but it's also very important from an airline perspective to not be caught out by these agreements. So, how do you sort of how are you approaching squaring that circle so that these agreements are actually tenable and they are certain that in the long term?

SPEAKER_01 21:44

Yeah. So uh number one, the revenue certainty uh definitely depends on the off take agreements, right? And among other things, off take agreement is the most important aspect, and I totally understand rather the Is the same concern that air times have shared with us in our discussions that uh why would like we are afraid of locking in a price today, yeah uh which is much higher than uh your typical jet fuel price and will probably come down in future. Um, there there is there is a logic to that, and then the second aspect is also what if let's say in the UK the RCM mechanism comes into picture and comes into full force, and there is actually a huge demand for the SAF uh fuel, um the and then there is not enough supply, and then those airlines will probably end up buying it at a more expensive price than they would probably lock in today, right? Yeah, but it's it's and these are the concerns that the the off-takers have already uh surfaced or shared. But I think um I will I will not try to solve for it in this podcast, but what of one of the uh things that book the book discusses is that how can we have a risk sharing mechanism between the developers and the uh off takers? So can we have so you can have a contract for 10 years, but then it can be indexed to the market prices of the jet fuels plus some margin, plus it cannot be more than the buyout price, the call, which is like the revenue certainty mechanism in its own way, is giving you a cap.

Infrastructure Access As A Precondition

SPEAKER_02 23:26

Yeah. And on the infrast on part two, the infrastructure access piece, is this something that producers are considering early enough? Because lots of people are looking at this as a great market opportunity and they're thinking about the project in silo. And I I'm not gonna speak for everyone, there are lots of people out there that absolutely are, and we've had many of them on the podcast that are looking at it as a as an ecosystem, as a full system of infrastructure. But is this something that isn't necessarily being considered early enough amongst a whole heap of other issues that producers and project developers have got to solve?

SPEAKER_01 24:07

Consistently, I would say. I I mean, I think people do tend to focus a lot more on the individual asset, and sometimes um the systems thinking aspect, the the, like you said, the considering the infrastructure access to actually making sure that the product goes to the market from the asset uh is available to the market. I think that is something that is not that is underconsidered sometimes. Um the pattern I see most often is that producers treat infrastructure as a downstream problem, something to be solved once the production decision is made. And capital providers read it the other way around. A production asset without confirmed infrastructure access is not a viable project. It is an aspiration with a site, if uh I can say so. So the producers who actually close financing, in my experience, are the ones who treat infrastructure access as a precondition for the production uh production decision and not like a consequence of it.

SPEAKER_02 25:18

Isn't that that's presumably the same for upstream when you're talking feedstock and access to feedstock for these facilities?

SPEAKER_00 25:25

Yeah.

SPEAKER_02 25:26

There's a lot of pieces of puzzles to put together once you put the where you're gonna ship it from, where are you gonna get your feedstock from, and where have you actually got the availability of the land itself and the permitting for the land to actually construct these sites? There is a lot of things to consider when going into like locating a SAF facility of any kind.

SPEAKER_01 25:48

100%. 100%. And that's what makes um number one for me, that's what makes it interesting because it's not the simplest problem to solve. Uh, and number two, it is also that's what makes it more challenging than your solar and wind assets, right? Like for solar project financing, a location with enough sun. Uh, you get the modules, you I mean, the execution these days in India, you can actually build solar projects within six months if you have like once the modules are there. It's that it's plug-and-play, right? Uh, but that's what makes screen molecules more complicated and interesting, is that there's so many parts of the value chain, and then each of it can be its a project on its own, right? Like feedstock sourcing is a huge task. Construction, I would say construction execution if you have the right EPC contractor and everything is on place and location, the technology is there, and the right engineers to integrate it all together, that's one bit, and then supply of the final product is the third bit, and then financing is the one that is basically covering all of it together. Um it is uh it is complicated.

SPEAKER_02 27:02

And on the the execution aspect, presumably, all of that come the execution piece, can only come in once you've got the infrastructure sorted, and the timeline associated with actually executing a project is actually really important because a lot of project developers only have a certain amount of capital and they have an expected runway, and the capital that's given to them, whether it's through venture capital, private equity, different uh investors, gives them a cash runway up to that point. But we are seeing a situation globally where there is a del often there's delays through various different reasons to project timelines. So actually managing the execution part is really challenging from a cash management perspective with a view to actually getting up through later, getting to FID, getting to the point where you can have lenders getting involved in that financing piece as well. So that's a really complicated process to go through with a lot of players. There's a big part of relationship management in the execution piece as well. Um it's okay.

SPEAKER_01 28:26

I I think what you're trying to say is this there's two bit uh two capex, right? Like one is DevEx before your FID is closed, and then your real CapEx, which is your hard costs, I would say. So we basically split in project finance, we we split the overall project costs in hard costs and soft costs. So your hard costs are essentially the costs toward uh the real construction, the real payments towards technology and balance of plant. Um and then your soft costs are advisory fees, technical due diligence fees, um, and other consulting fees that you need to pay while you are developing the while you're going through the devx phase, right? Uh, I think a lot of projects they do uh tend to rely on their sponsors' capital for the devx, some small investments from from funds which are trying to help with the devx. Private equities come a little later, not necessarily in that devx phase. And then when you when you are done with your devx costs, that when that's when you try and get the FID closed, that's when you give a projection of the real CapEx that will go into the hard costs of the project. Um, and then one of the soft costs that is still remaining is the interest during construction, IDC, which is basically um the interest that gets accumulated while your project is under construction, which is one of the risks that uh is there that if your construction period is extended beyond um the IDC increases, the interest still gets uh accumulated, right? Um, but the capex disbursement uh the that happens during the construction phase is basically milestone linked. So lenders do not give you one billion loan upfront. Uh you give uh yeah.

SPEAKER_02 30:24

That'd be nice with that.

SPEAKER_01 30:26

Would be um or investors, they basically you that that is linked to your CapEx phasing schedule, and uh the payments come in as and when you achieve certain milestones. They are also they also come in at the leverage ratio, so invest uh the sponsors have to infuse whatever equity ratio, um whatever portion of the equity is required to meet that uh gearing. So if it is 30%, 70%, if it's 40%, 60%, so the equity infusion happens and the uh lender's money comes in. So this is the mechanics of it. Um and then the question around the delays, right? So uh the risk is the because of this mechanics, the risk is dispersed across the three-year, four-year period. It is not it is not like lenders or investors are at risk because they signed the papers and gave the uh and the project has achieved financial closure. They they put the money at risk, which is propos like or which is corresponding to the milestone of the project.

Building Teams That Can Actually Deliver

SPEAKER_02 31:38

So that finance piece is incredibly complicated, and it seems to be there are more and more project developers who are coming who are looking at developing projects, so coming from the finance side of things, or have deep finance experience alongside some chemical and engineering experience because both of those aspects are the highly technical pieces of it that you just have to you have to get right, and having that expertise across those pieces seems to be the critical components of a team of a for a project developer in order to be successful. Would you say there's anything else that is in if you were moulding a team of a project developer that is there any other area of expertise you'd want to see involved in order for a project to look like it's going to be successful?

SPEAKER_01 32:39

Good Christian. And I don't know if you got the manuscript of my book because there is a chapter. There is a chapter where we actually cover around what are the capabilities that you need to have in-house to win in the next phase of energy transition. And project finance, which you covered, uh finance, right, is one of those capabilities that I think is I am again cannibalized at the risk of cannibalizing my own business. I would highly recommend that developers do uh get project finance professionals um in their teams. Uh, chemical engineering, of course, you know, you need a CTO when you are building a project of this uh when you're building such sophisticated projects. I am a civil engineer, I'm assuming for infrastructure and execution, you need civil engineers as well. Um, yeah. I think the the one thing is what about podcast hosts?

SPEAKER_02 33:35

Are they important?

SPEAKER_01 33:36

Of course, comms huge. No, but commun communication and and telling what you're building and creating momentum around it, and actually being able to reach the right people and um conveying the right messages is um is an important aspect.

SPEAKER_02 33:55

And I hope uh I I think you're being nice. I'm not sure that's a key component, right, the early stages. I think there's more important pieces than comms.

SPEAKER_01 34:04

I I think you are underscoring the importance, and I'm I'm saying it in with all the seriousness that a lot of times there are good ideas sitting with the teams and they are not being uh communicated to the investors or to the um to the counterparties the way they should be communicated. And uh an idea is just an idea if it is not communicated properly, right? If you need to execute it, uh it has to be told the way it can be understood by everyone. So, yes, communication I think is an important aspect. And unfortunately, I probably did not cover it in my book, but I would make sure that we that we talk about it enough. And um then, of course, uh the third thing is the systems thinking approach, uh, which basically sits with your project director um on an individual project, uh, which basically links um the feedstock with the asset, with the suppliers, and uh the the commercial strategy that is super important because the key contracts are whatever risk is there, then we the the risk is one of the key uh part of our bankability framework, right? Um, they either get allocated to the right contracts, so that structuring contract structuring is an important aspect, and people with commercial and contract strategy should be there, of course, in the firm, in the company, uh project company, developer to give you a whole system thinking view, finance, of course, to to see if those risks that the commercial director and the contract director was trying to was supposed to allocate correctly or mitigate correctly are actually mitigated or not. That's the finance check, the technical due diligence. Uh that of course there either are third party advisors on that, but the initial technology selection, etc., that's sits with your chemical engineer, your CTO. Um, it takes a village, right? So you need everyone, and of course, uh eventually you need to communicate it to the right people, and so we need podcast hosts inside the company.

SPEAKER_02 36:20

I'm not everyone should ignore that. I don't think every project should have a podcast host. There'd be too many podcasts, there's already enough podcasts as it is. That's too much.

SPEAKER_01 36:30

That's why I wrote a book. I was like, I don't want another podcast out there.

SPEAKER_02 36:38

Right. Um I want to get on to the fourth one, and I think if I was to pick a favorite, I think this is my favourite one, the risk allocation. And the we're we're recording this in a in a in a world of uncertainty, in the sense that the straight of the issues with Iran, the Strait of Hormuz has created a lot of uncertainty in oil prices, oil availability, and it's garnered wide conversations around energy security versus the narrative of environmental, the green aspect of sustainable aviation fuel, and whether it's actually just a good energy strategy to have domestic energy production. So how is how do you see that and evolving conversations around energy security affecting SAF projects, green molecules projects, and having to work in a world that I think everyone's realizing is increasingly unstable?

SPEAKER_01 37:54

We have a huge case study on this trade of homer, and um we cover it in depth, where basically the same because the chapter five, uh sorry, the chapter four is um the next influence logic. Yeah, so the chapter four is the next influence logic, where we talk about the the who influences the next decade of energy transition, right? And um then the next chapter is around the energy corridors, and these two chapters cover the geopolitical risks and everything that you just said. Um there are case studies where we have straight-of-homeries, there is a case study where we discuss Russia-Ukraine war and how that disrupted supply chains, and how uncertainty is uh going to impact or influence a lot of decisions uh around energy security, accessibility, and uh reliability, right? So this is definitely a topic of conversation today more than it was 10 years ago, and this is a topic of conversation more important for green molecules than it is for solar or wind, uh, because your renewable assets are basically more local in nature. You are producing power, you're plugging it into your transmission system, you're you know, you're basically providing green power to the country. But when you start uh even you are building a green molecule asset in India, you are potentially exporting the methanol to UK for a SAF refinery, which probably will produce methanol to JET. Um, and then that SAF will be delivered to to airlines that that have headquarters in the Mina or in Australia. So this is such a global play. There is no way you can ignore the geopolitical risk or underplay it. Project Finance always, by the way, in our framework, we always consider geopolitical risk as one of the key risks that we look into uh during our due diligence. I would say it has just taken up a lot more, it has moved up in the priority uh scoring criteria.

SPEAKER_02 40:17

Yeah. And given the world we're currently living in, do you think the argument for financing, building, developing SAF projects domestically in countries is stronger from an energy security argument now, or is it still the environmental reducing emissions argument? Or would you say they kind of go hand in glove at this point? You they can kind of work off each other.

Dry Powder And Why Capital Stays Selective

SPEAKER_01 40:47

Yeah, a third bit. You you answered it perfectly because I mean, I I think when you solve a problem and you think that, oh, we are trying to solve X, and that's why we are doing this, but if it is also solving Y and Z, what's the harm? So I think we are solving more problems than one at this point. It's not just about um emissions and uh the net zero targets, it is it has become more than that. And um and I think there is no silver bullet. You cannot just electrify everything, you cannot just solve everything with renewable power. Um you need everything that is possible.

SPEAKER_02 41:32

The we've had a long conversation around bankability and how projects can position themselves in order to receive capital. And you said at the beginning, there is an available availability of capital, there is a lot of dry powder available. So my slightly provocative question to you is if there is all of this dry powder available, but it's not being deployed because of bankability issues, is it actually available?

SPEAKER_01 42:06

Yes. Capital is always available, it is, but it is always selective. I think you're making an assumption that it's all one aggregate chunk, it's monolithic, it's it's sitting somewhere in one place.

SPEAKER_02 42:19

Um it's also highly competitive. Like in the renewable space, it's very competitive against other things. So getting financing for a SAF project, you're competing against various other renewables-related.

SPEAKER_01 42:33

But the IRs, right? You uh, if you look at the project IRRs for the renewable projects, they are not double-digit anymore. Gone are the days when they used to be, that was like 10-15 years ago. So the returns that you can make in because you know the risk is higher, and hence the returns should justify the risk, um are better with the green molecule assets.

SPEAKER_02 42:56

So final question. You this is volume one, so presumably that means there will be a volume two. What would you like to write in volume two?

SPEAKER_01 43:10

Good question. I actually haven't thought about it, but the reason I I called it volume one and I wanted to definitely come up, come back with volume two, is I'm writing something about the next 10 years. So I want to give an update of where we are, let's say if the next book comes in three years from now, what we achieved in the last three years, where we are today, did we make any? Where was I wrong? Were were there certain hypotheses that were actually proven right? Or were you know where did we what did we predict and was actually not true? Um I think there needs to be an update to the audience.

SPEAKER_00 43:57

Yeah.

SPEAKER_01 43:58

So I I would have Do that, and I would love to have success stories in that book. I think currently my book has only two uh case studies, um two success stories. I think in the next volume I would love to have more success stories.

SPEAKER_02 44:16

Fantastic. Well, the book is available now, so if you want it, go and buy it, go and go and get it. The decisive decade, what will it take to win on bankability in the next phase of energy transition? Shubda hasn't quite told you all about it, so you still need to read it. I'm gonna emphasize that. We haven't covered it all, so do go and read it. Shubda, thanks so much. That was a fantastic deep dive into all things bankability and best of luck with the book.

SPEAKER_01 44:50

Thank you so much. Loved it. By the way, this is the first podcast where we have spoken about the book at length, and the next thing that we are doing on our book tour is um the one in Madrid on 17th, 18th June, where we will do a brief reading of one of the passages on from chapter three, how to unlock capital, uh, given the panel that we uh that I'm moderating is also on unlocking capital. So I'm super happy that we we basically you are the first podcast to get uh to get to talk about the book with us, with me.

SPEAKER_02 45:26

We're we're so thrilled that we were able to do this and that we were the first stop. So thank you for letting us do that. Massively appreciate it. And yeah, we'll um I'll see you in Madrid in in June.

SPEAKER_01 45:42

Oh, you're coming as well?

SPEAKER_02 45:43

I am going I'm going to be there.

SPEAKER_01 45:44

Oh amazing. I did not know that. Yeah. See you in Madrid.