Published: Fri, Nov 11, 2016
Type: Publication

Access to finance remains a critical barrier to accelerating deployment of renewables and there is a need to engage a broad range of investors to increase the pool of capital and reduce the cost of capital.

Although wind and solar photovoltaic are increasingly competitive technologies, and demand for renewable assets from investors is rising, business-as-usual investment will not deliver the required volume (and cost) of capital needed. In terms of volume, approximately 40% increase above business as usual investment is required and challenges to achieve this remain.

The report details five key findings raised through dialogues between the industry and investment community on what is needed to scale finance for renewable energy, including the importance of engaging new investors to the sector, the potential of new financing vehicles and the unique challenges and opportunities of emerging markets.

The report highlights a number of key takeaways which were identified in the discussions on scaling finance, including:

  • The range of investor types active in renewable energy is growing, while there is a need to build and maintain the credibility of the sector;
  • New financing vehicles, such as green bonds, are a key opportunity to scale finance for renewables, with promising recent growth and strong demand from investors;
  • A unique set of challenges and opportunities arises with developing and financing projects in emerging markets, where most future investment will be made. This shows that the role of multilateral development banks as a capital and risk intermediary is critical;
  • The perceived disconnect between capital availability and project availability needs to be overcome. Mutual education, de-risking of projects and greater disclosure of forthcoming pipelines will be beneficial.