Mobilizing Finance and Investment

Latest updates

In March, USAID Clean Power Asia signed three letters of engagement with companies developing RE projects. The program is now actively supporting eight companies, covering over 400 MW of RE in Thailand and Vietnam, including distributed photovoltaics (DPV), floating solar, utility-scale solar, biomass, and wind. Our support to these companies includes providing advice on financial structuring for utility-scale solar, supporting requests for proposals for DPV projects in Vietnam, and facilitating partnerships between developers and investors.

Also this month, investment mobilization staff participated in the fourth meeting of the Renewable Energy Buyers Alliance (REBA) Vietnam Working Group in Ho Chi Minh City, hosted by the Clean Energy Investment Accelerator and USAID V-LEEP. Participants at the meeting discussed the status of corporate RE in Vietnam, gathered feedback on the recent draft government decision on rooftop solar, and provided a high-level summary of the direct power purchase agreement mechanism. Attendees at the event primarily included private sector representatives, both large energy consumers and RE project developers, all with an interest in scaling up corporate use of RE in Vietnam.

 

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.