Mobilizing Finance and Investment

Updates from May 2019

USAID Clean Power Asia is coordinating with the Private Financing Advisory Network (PFAN), NREL, and the Asian Development Bank (ADB) on a deep-dive workshop on Utility-Scale Renewables: Challenges in Developing Solar and Wind Energy Projects at the Asia Clean Energy Forum (ACEF) in Manila next month. The workshop will run all day on Friday, June 21, and will focus on challenges faced by different stakeholders in the development of utility-scale wind energy and solar PV projects in Asia, including discussions on costs and barriers to investment in wind and solar in the region, panel discussions with private and public sector representatives, and case studies of the development of specific solar and wind projects. You can register here or get more information here.

This month, USAID Clean Power Asia participated in a training workshop for the Bank for Investment and Development of Vietnam (BIDV) on the Fundamentals of Financing Solar PV Projects. Investment mobilization staff presented a session on project finance characteristics, cash flow analysis for utility-scale solar farms, and critical success factors in lending to solar projects, followed by a demonstration of a typical financial model used by banks to analyze cash flow projections for solar projects. Workshop participants worked on a case study and financial modeling exercise that allowed them to gain hands-on experience in analyzing a solar project. BIDV has already financed a number of solar projects and this workshop strengthened the bank’s ability to assess additional solar projects.  


How we mobilize finance and investment

Although renewable energy investments offer a range of promising new business opportunities, project developers have faced formidable financial and regulatory challenges. In the Lower Mekong region in particular, renewable energy projects receive less interest than traditional capital investments and barriers exist for banks and financial institutions to effectively engage and invest in renewable energy.

USAID supports financial institutions, developers, and other relevant stakeholders to secure and reduce the cost of finance for renewable energy projects by helping to develop innovative business models; promoting standardized documentation and evaluation practices and approval processes for financing renewable energy projects; and providing other advisory services. A broad range of models, strategic adoption of cost-efficient technologies, and comprehensive policies and regulations are key to structuring bankable projects that appeal to commercial developers. Renewable energy offers control of energy costs and margins, while tools and business models under development will improve the risk/reward profile of new projects.