IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v13y2019i1p82-d301156.html
   My bibliography  Save this article

Balanced Scorecard-Based Evaluation of Sustainable Energy Investment Projects with IT2 Fuzzy Hybrid Decision Making Approach

Author

Listed:
  • Pengran Zhou

    (Faculty of Education, Tianjin Normal University, Tianjin 300387, China)

  • Pengfei Zhou

    (School of Economics and Management, Chongqing Normal University, Chongqing 401331, China)

  • Serhat Yüksel

    (School of Business, Istanbul Medipol University, Kavacık South Campus, 34810 Istanbul, Turkey)

  • Hasan Dinçer

    (School of Business, Istanbul Medipol University, Kavacık South Campus, 34810 Istanbul, Turkey)

  • Gülsüm Sena Uluer

    (School of Business, Istanbul Medipol University, Kavacık South Campus, 34810 Istanbul, Turkey)

Abstract

The purpose of this study is to determine the issues that financial institutions should pay attention to in their decision to provide financing to large scale energy projects. Within this framework, taking into account the Balanced Scorecard (BSC) approach, 4 dimensions and 8 criteria that can be effective in these decisions of financial institutions were determined. After that, the importance weights of these dimensions and criteria were determined by interval type-2 (IT2) fuzzy DEMATEL method. In addition, 3 different types of banks (public, private, foreign) are listed for their performance in financing energy projects. According to the results of the analysis, the technological and financial adequacy of the company that will invest in energy is the issue that financial institutions should pay the most attention to in their credit decision. Therefore, it is important for financial institutions to visit the customer's location and pay attention to the technological adequacy in the process of evaluating the customer's demand for credit for a large-scale energy project. In addition, it would be appropriate not to provide this fund to the energy companies with high indebtedness and insufficient liquidity. Another result of the study is that state banks have the lowest performance in financing these large-scale energy projects. When this result is taken into consideration, state banks need to pay more attention in evaluating large-scale energy projects in order to avoid major losses.

Suggested Citation

  • Pengran Zhou & Pengfei Zhou & Serhat Yüksel & Hasan Dinçer & Gülsüm Sena Uluer, 2019. "Balanced Scorecard-Based Evaluation of Sustainable Energy Investment Projects with IT2 Fuzzy Hybrid Decision Making Approach," Energies, MDPI, vol. 13(1), pages 1-20, December.
    • Handle: RePEc:gam:jeners:v:13:y:2019:i:1:p:82-:d:301156
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/13/1/82/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/13/1/82/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dincer, Hasan & Yuksel, Serhat, 2019. "Balanced scorecard-based analysis of investment decisions for the renewable energy alternatives: A comparative analysis based on the hybrid fuzzy decision-making approach," Energy, Elsevier, vol. 175(C), pages 1259-1270.
    2. Thiam Hee Ng, . "Bond Financing for Renewable Energy in Asia," Chapters, in: Shigeru Kimura & Youngho Chang & Yanfei Li (ed.), Financing Renewable Energy Development in East Asia Summit Countries A Primer of Effective Policy Instruments, chapter 11, pages 321-342, Economic Research Institute for ASEAN and East Asia (ERIA).
    3. Hasan Dinçer & Serhat Yüksel & Renata Korsakienė & Agota Giedrė Raišienė & Yuriy Bilan, 2019. "IT2 Hybrid Decision-Making Approach to Performance Measurement of Internationalized Firms in the Baltic States," Sustainability, MDPI, vol. 11(1), pages 1-22, January.
    4. Yoshino, Naoyuki & Taghizadeh-Hesary, Farhad, 2017. "Alternatives to Bank Finance: Role of Carbon Tax and Hometown Investment Trust Funds in Developing Green Energy Projects in Asia," ADBI Working Papers 761, Asian Development Bank Institute.
    5. Carlo Alberto Magni, 2016. "An Average-Based Accounting Approach to Capital Asset Investments: The Case of Project Finance," European Accounting Review, Taylor & Francis Journals, vol. 25(2), pages 275-286, June.
    6. Kozlova, Mariia & Fleten, Stein-Erik & Hagspiel, Verena, 2019. "Investment timing and capacity choice under rate-of-return regulation for renewable energy support," Energy, Elsevier, vol. 174(C), pages 591-601.
    7. Ziyuan Tang & Hasan Dinçer, 2019. "Selecting the House-of-Quality-Based Energy Investment Policies for the Sustainable Emerging Economies," Sustainability, MDPI, vol. 11(13), pages 1-22, June.
    8. Pacudan, Romeo, 2016. "Implications of applying solar industry best practice resource estimation on project financing," Energy Policy, Elsevier, vol. 95(C), pages 489-497.
    9. Francesco Campanella & Luana Serino & Teresa Nelli & Domenico Graziano, 2018. "Macroeconomics Effects on Project Finance Performances and Sustainability," International Business Research, Canadian Center of Science and Education, vol. 11(6), pages 21-28, June.
    10. Diaz, Gabriel & Inzunza, Andrés & Moreno, Rodrigo, 2019. "The importance of time resolution, operational flexibility and risk aversion in quantifying the value of energy storage in long-term energy planning studies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 112(C), pages 797-812.
    11. Subramanian, Krishnamurthy V. & Tung, Frederick, 2016. "Law and Project Finance," Journal of Financial Intermediation, Elsevier, vol. 25(C), pages 154-177.
    12. Shahbaz, Muhammad & Balsalobre-Lorente, Daniel & Sinha, Avik, 2019. "Foreign Direct Investment–CO2 Emissions Nexus in Middle East and North African countries: Importance of Biomass Energy Consumption," MPRA Paper 91729, University Library of Munich, Germany, revised 19 Jan 2019.
    13. Lee, Cheuk Wing & Zhong, Jin, 2015. "Financing and risk management of renewable energy projects with a hybrid bond," Renewable Energy, Elsevier, vol. 75(C), pages 779-787.
    14. Steffen, Bjarne, 2018. "The importance of project finance for renewable energy projects," Energy Economics, Elsevier, vol. 69(C), pages 280-294.
    15. Laureti, Tiziana & Montero, José-María & Fernández-Avilés, Gema, 2014. "A local scale analysis on influencing factors of NOx emissions: Evidence from the Community of Madrid, Spain," Energy Policy, Elsevier, vol. 74(C), pages 557-568.
    16. Mora, Esteve Borràs & Spelling, James & van der Weijde, Adriaan H. & Pavageau, Ellen-Mary, 2019. "The effects of mean wind speed uncertainty on project finance debt sizing for offshore wind farms," Applied Energy, Elsevier, vol. 252(C), pages 1-1.
    17. Ng, Thiam Hee & Tao, Jacqueline Yujia, 2016. "Bond financing for renewable energy in Asia," Energy Policy, Elsevier, vol. 95(C), pages 509-517.
    18. Cavallaro, Fausto & Zavadskas, Edmundas Kazimieras & Streimikiene, Dalia & Mardani, Abbas, 2019. "Assessment of concentrated solar power (CSP) technologies based on a modified intuitionistic fuzzy topsis and trigonometric entropy weights," Technological Forecasting and Social Change, Elsevier, vol. 140(C), pages 258-270.
    19. Cruz, Carlos Oliveira & Sarmento, Joaquim Miranda, 2018. "The price of project finance loans for highways," Research in Transportation Economics, Elsevier, vol. 70(C), pages 161-172.
    20. Frederick S. Ahiabor & Gregory A. James, 2019. "Domestic lead arranger certification and the pricing of project finance loans," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 24(1), pages 150-167, January.
    21. Shiraishi, Kenji & Shirley, Rebekah G. & Kammen, Daniel M., 2019. "Geospatial multi-criteria analysis for identifying high priority clean energy investment opportunities: A case study on land-use conflict in Bangladesh," Applied Energy, Elsevier, vol. 235(C), pages 1457-1467.
    22. Geroe, Steven, 2019. "Non-recourse project financing for concentrated solar thermal power," Utilities Policy, Elsevier, vol. 60(C), pages 1-1.
    23. Panagiotis Dimitropoulos & Ioannis Kosmas & Ioannis Douvis, 2017. "Implementing the balanced scorecard in a local government sport organization," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 66(3), pages 362-379, March.
    24. Jianrong Yao & Jin Liu, 2016. "E-Government Project Evaluation: A Balanced Scorecard Analysis," Journal of Electronic Commerce in Organizations (JECO), IGI Global, vol. 14(1), pages 11-23, January.
    25. Sainati, Tristano & Locatelli, Giorgio & Smith, Nigel, 2019. "Project financing in nuclear new build, why not? The legal and regulatory barriers," Energy Policy, Elsevier, vol. 129(C), pages 111-119.
    26. Yun, Sunyoung & Lee, Joosung & Lee, Sungjoo, 2019. "Technology development strategies and policy support for the solar energy industry under technological turbulence," Energy Policy, Elsevier, vol. 124(C), pages 206-214.
    27. Choi, Bongseok & Kim, Seon Tae, 2018. "Price volatility and risk management of oil and gas companies: Evidence from oil and gas project finance deals," Energy Economics, Elsevier, vol. 76(C), pages 594-605.
    28. Ian A. Cooper & Kjell G. Nyborg, 2018. "Consistent valuation of project finance and LBOs using the flows†to†equity method," European Financial Management, European Financial Management Association, vol. 24(1), pages 34-52, January.
    29. Stephen Hall & Timothy J Foxon & Ronan Bolton, 2017. "Investing in low-carbon transitions: energy finance as an adaptive market," Climate Policy, Taylor & Francis Journals, vol. 17(3), pages 280-298, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peiwen Wang & Yan Lin & Zhiping Wang, 2022. "An Integrated Decision-Making Model Based on Plithogenic-Neutrosophic Rough Number for Sustainable Financing Enterprise Selection," Sustainability, MDPI, vol. 14(19), pages 1-23, September.
    2. Bahman Huseynli, 2023. "Renewable Solar Energy Resources Potential and Strategy in Azerbaijan," International Journal of Energy Economics and Policy, Econjournals, vol. 13(1), pages 31-38, January.
    3. Zhou, Pengfei & Luo, Jie & Cheng, Fei & Yüksel, Serhat & Dinçer, Hasan, 2021. "Analysis of risk priorities for renewable energy investment projects using a hybrid IT2 hesitant fuzzy decision-making approach with alpha cuts," Energy, Elsevier, vol. 224(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yuanxin Liu & FengYun Li & Xinhua Yu & Jiahai Yuan & Dong Zhou, 2018. "Assessing the Credit Risk of Corporate Bonds Based on Factor Analysis and Logistic Regress Analysis Techniques: Evidence from New Energy Enterprises in China," Sustainability, MDPI, vol. 10(5), pages 1-21, May.
    2. Yoshino, Naoyuki & Taghizadeh–Hesary, Farhad & Nakahigashi, Masaki, 2019. "Modelling the social funding and spill-over tax for addressing the green energy financing gap," Economic Modelling, Elsevier, vol. 77(C), pages 34-41.
    3. Best, Rohan & Burke, Paul J., 2018. "Adoption of solar and wind energy: The roles of carbon pricing and aggregate policy support," Energy Policy, Elsevier, vol. 118(C), pages 404-417.
    4. Monasterolo, Irene & de Angelis, Luca, 2020. "Blind to carbon risk? An analysis of stock market reaction to the Paris Agreement," Ecological Economics, Elsevier, vol. 170(C).
    5. Leszek Dziawgo, 2021. "Energy Sectors on Capital Market – Financing the Process “Towards Sustainability”," European Research Studies Journal, European Research Studies Journal, vol. 0(2B), pages 938-955.
    6. Barroco, Jose & Herrera, Maria, 2019. "Clearing barriers to project finance for renewable energy in developing countries: A Philippines case study," Energy Policy, Elsevier, vol. 135(C).
    7. repec:eco:journ2:2017-04-15 is not listed on IDEAS
    8. Blazquez, Jorge & Galeotti, Marzio & Martin-Moreno, Jose M., 2021. "Green recovery packages for a post-Covid-19 world: A lesson from the collapse of Spanish wind farms in the past financial crisis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 151(C).
    9. Dejun Qiu & Hasan Dinçer & Serhat Yüksel & Gözde Gülseven Ubay, 2020. "Multi-Faceted Analysis of Systematic Risk-Based Wind Energy Investment Decisions in E7 Economies Using Modified Hybrid Modeling with IT2 Fuzzy Sets," Energies, MDPI, vol. 13(6), pages 1-25, March.
    10. Sarah Hafner & Olivia James & Aled Jones, 2019. "A Scoping Review of Barriers to Investment in Climate Change Solutions," Sustainability, MDPI, vol. 11(11), pages 1-19, June.
    11. Jin, Yi & Gao, Xiaoyan & Wang, Min, 2021. "The financing efficiency of listed energy conservation and environmental protection firms: Evidence and implications for green finance in China," Energy Policy, Elsevier, vol. 153(C).
    12. McHugh, Christopher A., 2023. "Competitive conditions in development finance," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 83(C).
    13. Qinghua Wang & Yaning Zhou & Li Luo & Junping Ji, 2019. "Research on the Factors Affecting the Risk Premium of China’s Green Bond Issuance," Sustainability, MDPI, vol. 11(22), pages 1-14, November.
    14. Alfonso Aranda-Usón & Pilar Portillo-Tarragona & Luz María Marín-Vinuesa & Sabina Scarpellini, 2019. "Financial Resources for the Circular Economy: A Perspective from Businesses," Sustainability, MDPI, vol. 11(3), pages 1-23, February.
    15. Firouzi, Afshin & Meshkani, Ali, 2021. "Risk-based optimization of the debt service schedule in renewable energy project finance," Utilities Policy, Elsevier, vol. 70(C).
    16. Changqing Luo & Siyuan Fan & Qi Zhang, 2017. "Investigating the Influence of Green Credit on Operational Efficiency and Financial Performance Based on Hybrid Econometric Models," IJFS, MDPI, vol. 5(4), pages 1-19, November.
    17. Tat Dat Bui & Mohd Helmi Ali & Feng Ming Tsai & Mohammad Iranmanesh & Ming-Lang Tseng & Ming K Lim, 2020. "Challenges and Trends in Sustainable Corporate Finance: A Bibliometric Systematic Review," JRFM, MDPI, vol. 13(11), pages 1-26, October.
    18. Stetter, Chris & Piel, Jan-Hendrik & Hamann, Julian F.H. & Breitner, Michael H., 2020. "Competitive and risk-adequate auction bids for onshore wind projects in Germany," Energy Economics, Elsevier, vol. 90(C).
    19. Zhou, Pengfei & Luo, Jie & Cheng, Fei & Yüksel, Serhat & Dinçer, Hasan, 2021. "Analysis of risk priorities for renewable energy investment projects using a hybrid IT2 hesitant fuzzy decision-making approach with alpha cuts," Energy, Elsevier, vol. 224(C).
    20. Pan, Yu & Liu, Liuchen & Zhu, Tong & Zhang, Tao & Zhang, Junying, 2017. "Feasibility analysis on distributed energy system of Chongming County based on RETScreen software," Energy, Elsevier, vol. 130(C), pages 298-306.
    21. Kim, Seon Tae & Choi, Bongseok, 2019. "Price risk management and capital structure of oil and gas project companies: Difference between upstream and downstream industries," Energy Economics, Elsevier, vol. 83(C), pages 361-374.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:13:y:2019:i:1:p:82-:d:301156. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.