Mobilizing Finance and Investment

Updates from July 2019

USAID Clean Power Asia investment mobilization staff issued a request for proposal for the preparation of three legal documents for the solar pilot auction in Lao PDR: a power development agreement, a concession agreement, and a power purchase agreement. These standard documents will be part of the legally binding documentation required for the solar pilot auction implementation, to be signed by the Lao PDR government and any successful auction bidders. Program staff are currently reviewing the proposals and preparing to contract with the selected law firm.

 

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.