Scaling Up Renewable Energy in Low Income Countries
Overcoming barriers for renewable energy deployment and attracting finance for investments in low income countries
March 19, 2010
9:00am–12:45pm
ADB Auditorium, Zone C & D
A G E N D A
9:00-9:10am: Introduction to the Program for Scaling up Renewable Energy in Low Income Countries
by Brigitte Cuendet, Sub-Committee Member, Switzerland
Session 1
9:10–10:30am: Understanding the Challenges Facing Renewable Energy Scale up in Low Income Countries
| Key questions: What risks and barriers face the large scale deployment of renewable energy technologies at the country level? How can SREP draw on experience and best practice to help inform the design and facilitate the success of country level investment in renewable energy? |
Panel:
- Jesus T. Tamang, Director, Energy Policy and Planning Bureau, Department of Energy, Philippines
- Naceur Hammami, Advisor on Rural Energy to Minister of Energy, Rwanda
- Elsia Paz, President, Honduran Renewable Energy Association for Small Scale Projects, Honduras
- Anthony K. Ng`eno, Managing Director, Winafrique Technologies Ltd., Kenya
- Takao Shiraishi, Newjec Co., Japan
10:30—11:00am: Break
Session 2
11:00am–12:30pm: Addressing Renewable Energy Financing: New Opportunities and Success Stories
| Key questions: SREP investments are intended to initiate transformational changes in low income countries through the large scale deployment of renewable energy technologies. How can SREP complement and leverage co-financing from other development partners, private sector, and financial institutions. to achieve this transformation? How can SREP learn from current successes in using innovative financing mechanisms to inform its design? |
Panel:
- Govind Raj Pokharel, Manager for Pakistan, Indonesia and Bangladesh Programmes, SNV Netherlands Development Organization, Nepal
- Donald Morales, SREP Sub-Committee Member, Nicaragua
- Georg Grüner, Sector Economist and Project Manager, Energy Sector and Policy Division Asia, KfW Banking Group, Germany
- Ambachew Fekadeneh Admassie, SREP Private Sector Observers, Carbon Finance Working Group, Ethiopia
12:30 – 12:45 Wrap up and key messages
Moderator Bart Edes, Director, Poverty Reduction, Gender and Social Development (ADB)
Session 1: Understanding the Challenges Facing Renewable Energy Scale up in Low Income Countries
Key questions:
1. What risks and barriers face the large scale deployment of renewable energy technologies at the country level?
A wide range of risks are at play with respect to developing the renewable energy sector in low income countries, ranging from strategic risks associated with choosing the right technology, regulatory risks of getting the policies right, heightened operational risks associated with new technology deployment and a whole host of financial risks associated with any capital intensive infrastructure. In many developing countries the private sector often has difficulty accessing the credit markets, which due to limited liquidity and market instabilities very seldom offers the sort of medium and long-term financing needed for infrastructure investments. For renewable energies, weak financial markets create not only a problem of access to finance but also introduce a bias towards investment in fossil fuel based technologies. Because renewable energy projects are more capital cost intensive, high interest rates, short maturities and low debt-to-equity gearing requirements shift the price per kWh upwards relative to conventional energy systems. In low income countries, government intervention is necessary to unlock and scale-up investment in renewable energy technologies. What are the most important risks and barriers to address in scaling-up renewables deployment in low income countries and what are some examples of where this has been done most effectively?
2. How can SREP draw on experience and best practice to help inform the design and facilitate the success of country level investment in renewable energy?
The renewable energy sector has been advancing quickly and countries now have a growing body of experience to draw on globally when planning regulatory approaches and public financing mechanisms. SREP will need to assist countries in leveraging this experience into country specific approaches that can deliver clean energy at scale. Within the realm of public financing, learning from experience and building absorptive capacity will be a key issue in pilot countries, both in terms of developing the project pipelines and the enabling conditions needed to make them commercially viable. How can this learning be best translated into country investment plans and implementation activity?
Session 2: Addressing Renewable Energy Financing: Success Stories and New Opportunities
Key Questions:
1. SREP investments are intended to initiate transformational changes in low income countries through the large scale deployment of renewable energy technologies. How can SREP complement and leverage co-financing from other development partners, private sector, and financial institution to achieve this transformation?
While many experts maintain that there is no shortage of money available for financing renewable energy projects, there remains a huge financing gap for renewable energy in low income countries. Transformational change can only be achieved if financing is available, affordable and accessible for all participants in the renewable energy market—from project developer to end user. Development partners will continue to play an important role in scaling up renewable energy technologies, especially through ongoing support for soft costs such as capacity building. But to achieve large-scale deployment, a large share of financing will have to come from the private sector. The private sector is a critical partner, and it can be most effective in scaling up renewable energy. Bilateral agencies and other development partners will also likely play an increasingly important role in financing renewable energy and climate-related investments. How can SREP country investment plans complement existing initiatives, leverage co-financing and “crowd-in” activities of the private sector and other development partners under a common programmatic approach (the SREP investment plans) to achieve large-scale deployment of renewable energy technologies?
2. How can SREP learn from current successes in using innovative approaches and financing mechanisms to inform its design?
There are many good examples globally of how innovative financing mechanisms—including but not limited to microfinance, carbon finance, credit conditioning instruments, patient capital, and long-term debt—have increased deployment of renewable energy technologies. To achieve transformational change, a range of innovative financing mechanisms will be required across the financing continuum. How can SREP country investment plans effectively integrate the lessons learned from projects targeting a limited segment of the market (e.g., end-users) into the design of broader programs targeting multiple segments of the market that aim to achieve transformational change?
