Mobilizing Finance and Investment

Updates from October 2020

On October 28, USAID Clean Power Asia investment mobilization staff, in coordination with the Global Wind Energy Council, held an online training workshop on financing wind power projects in Vietnam. The workshop discussed the concept and features of project finance, and how to conduct a financial analysis for a wind project. Eight local wind developers participated in the workshop, who also worked on a case study and financial modeling exercise to enhance their practical understanding of project finance.

After a meeting with the Working Committee for the Laos solar pilot auction this month, USAID Clean Power Asia investment mobilization staff compiled comments on the final draft legal documents (Concession Agreement and Power Purchase Agreement) for the auction. Program staff shared all comments with legal counsel DFDL, who provided clarifications, and we are currently finalizing all the necessary legal documents, including the Head of Agreement, and will request DFDL to translate all final documents into the Lao language before submitting to the Working Committee.

 

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.