Question

Would building the grid mean a tax increase for some countries?

Key Words

grid, tax increase, countries, issues, infrastructure development loans/bonds, raising capital, taxes, transmission lines, electricity flow, tax reductions, build-own-operate, build-own-transfer

Answer

Taxes are rarely the way that power projects and transmission grids are financed.

There are numerous financing methods used, since projects can range from a few thousand dollars for decentralized generation, or several million to a billion dollars for large systems. Some large projects are funded by utilities themselves, while others are built by governments and funded through bond offerings.

In some developing nations, the developer may assist in financing through several schemes: build-own-operate, build-own-transfer, obtain regional bank financing. At the end of every energy project is a customer who wants lighting, refrigeration, communication, etc. — and their monthly payments ultimately pay for the project.

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