Fashion for Good and Spring Lane Capital have teamed up to help unlock the capital needed to scale sustainable innovation in the textile industry. Their new report, “The Great Unlock: Closing the innovation commercialisation gap through project finance solutions”, reviews the different types of capital available to close the funding gap within the commercialisation stage.

The report discusses the benefits, requirements, and opportunities related to project finance as a funding solution in this space, and highlights the roles that various stakeholders would need to play in order to bring this to life.

The report aims to enhance innovators’ understanding of relevant industry stakeholders and ultimately assists in further enabling the scaling of much-needed innovation.

Project Finance as a Solution

The bulk of the funding needed will come from debt financing, with project finance serving as a key solution due to the strong focus on risk mitigation and allocation, which the structured nature of such funding provides.

Project finance is a specialized type of financing in which the project's assets and cash flows serve as collateral for the loans used to finance the project. Project finance distinguishes itself by mitigating risks, bolstering credit ratings, and allowing for greater borrowing capacity based solely on the project's viability. It thereby offers a lifeline to innovators who may lack creditworthiness in traditional financing channels.

Project finance is particularly beneficial for new technologies because it allows them to scale effectively and faster compared to traditional funding channels. Project finance also gives access to broader debt capital markets and offers longer repayment periods compared to corporate finance, making it more attractive for technology development.