Riding the Wave of Renewable Energy: Exploring the Power of Carry Arrangements in the Green Industry.

This article examines the potential application of Carried Interest Arrangements (Carry Arrangements)—a financing mechanism traditionally used in oil and gas joint ventures—in the renewable energy industry to facilitate collaboration and accelerate the low-carbon energy transition. It highlights how oil and gas companies can leverage their expertise in supply chains, market development, and joint ventures to support renewable energy projects, while addressing challenges such as differing regulatory environments, revenue recovery issues, and the intermittent nature of renewables. Using Nigeria as a case study, the article discusses the adaptation of Carry Arrangements to renewable energy financing, emphasizing the need for tailored structures that reflect sector-specific risks and operational differences. It also explores policy measures to encourage partnerships between traditional and renewable energy players and underscores the role of Carry Arrangements in aligning interests, mitigating risks, and attracting investment to promote sustainable energy development.