How does inflation affect the project's returns?

Financial Metrics

In projects with an inflation-indexed PPA, the price the host user pays rises with inflation and protects the SPV's real revenue. In projects selling surplus at the spot price, it depends on how that market moves.

For the investor: higher-than-projected inflation can lift indexed revenue and raise OPEX at the same time. Each project's indexation assumption is on its sheet.

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How does inflation affect the project's returns? | FAQ | Circular Urban