Mobilizing Finance and Investment

Updates from February 2020

This month, USAID Clean Power Asia investment mobilization staff participated in a meeting of the Southeast Asia Task Force of the Global Wind Energy Council (GWEC), held on the sidelines of the Future Energy Asia conference in Bangkok. The Task Force is a key tool to promote wind energy in emerging markets in the region, focusing on Vietnam, Thailand, Indonesia, and the Philippines. Program staff joined the meeting in the context of our work with GWEC on supporting regional wind power associations. GWEC is in discussions with the local wind industry in Vietnam and Indonesia to organize roundtable discussions between the government and the wind industry.

Also in February, USAID Clean Power Asia investment mobilization staff held consultations with Thai banks to gather feedback on the structure and design of the solar pilot auction in Lao PDR, including draft legal documents, such as the power purchase agreement and concession agreement. As finance plays a crucial role in stimulating private sector participation in the auction, the consultations are meant to ensure that the power purchase agreement and related elements are bankable. Feedback from the banks, as well as pending feedback from the solar pilot auction Working Committee in Lao PDR, will be shared with a law firm we engaged to ensure the legal documents can be finalized in time for inclusion in the auction announcement package.


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.