Mobilising Private Investment

Overcoming risks and barriers to renewable energy investment

Scaling up renewables in line with their potential to meet energy security and climate objectives requires significantly larger investment than currently forecasted. Although public finance serves an important role, it is unlikely to increase above its current level of 15% and thus private finance will need to supply the lion’s share of new investment in renewables. However, there are constraints that prevent the private sector from accessing many of the existing investment opportunities.

IRENA’s report 'Unlocking Renewable Energy Investment: the Role of Risk Mitigation and Structured Finance', analysed various financial instruments and structures and suggested areas for action to address the constraints and mobilise private investment. Collective effort by policymakers and international financial institutions should focus on five main areas:

In its REThinking Energy 2017 report, IRENA has also developed a set of strategies from an institutional perspective that would potentially help close this investment gap and ensure a rapid increase in renewable energy uptake through 2030.

Scaling up investment volume through streamlining solar project documentation

The Global Solar Energy Standardisation Initiative is a joint initiative by IRENA & Terrawatt (TWI) launched in June 2016, with an objective of standardising key contract documents required in solar PV projects, including PPA, O&M Agreements, Supply Agreements, Fit & Commissioning Agreements and Finance Facility Agreement.

By simplifying and streamlining contracts for solar PV, the Initiative aims to reduce project review time and transaction costs, and provide a basis for aggregating and securitising assets to scale up investment volume.

 


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