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Increasing private capital investment into energy access: The case for mini-grid pooling facilities

dc.contributor.authorUniversity of California Berkeley
dc.contributor.authorStanford University
dc.contributor.authorUnited Nations Environment Programme
dc.descriptionMini-grids are viewed as one of the key elements in securing universal energy access in the developing world. However, current levels of investment into renewable decentralized energy are insufficient to reach the development goals identified by initiatives such as the UN’s Sustainable Energy for All. In order to reach such levels of deployment, new models of financing need to be designed. In this report, we provide a conceptual framework for the development of a private sector facility to pool and cross-collateralize diverse capital to support international mini-grid portfolios. We begin by discussing the current status of electrification initiatives in developing countries, and the approaches adopted to access finance for their implementation. We then argue that two key barriers exist to the effective financing of mini-grids. First, mini-grids in emerging markets have a complex risk profile that is difficult to mitigate at the individual project level. Furthermore, individual mini-grid projects are so small that their fixed transaction costs reduce their financial viability.
dc.publisherUnited Nations Environment Programme
dc.subjectRenewable energy
dc.subjectCarbon finance
dc.subject.classificationClimate Change
dc.titleIncreasing private capital investment into energy access: The case for mini-grid pooling facilities
dc.typeReports and Books
wd.identifier.sdgSDG 7 - Affordable and Clean Energy

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