Mobilizing Finance and Investment

Updates from August 2020

USAID Clean Power Asia investment mobilization staff consolidated feedback on the draft legal documents for the Laos solar pilot auction, as provided by Laos government entities, private financial institutions, and technical partner HNEI. The legal documents include the Head of Agreement, Concession Agreement and Power Purchase Agreement, and program staff met with legal advisor DFDL to discuss all of the comments. DFDL is currently finalizing the legal documents, so that these can be shared with the auction Working Committee in early September.

 

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.