Derisking renewable energy investment: A framework to support policymakers in selecting public instruments to promote renewable energy investment in developing countries
The DREI framework systematically identifies the barriers and associated risks that can hold back private sector investment in renewable energy. It assists policymakers to put in place packages of targeted public interventions to address these risks. Each public intervention acts in one of three ways: reducing, transferring, or compensating for risk. The overall aim is to cost effectively achieve a risk return profile that catalyzes private sector investment in developing countries at scale. The report describes the framework’s four stages: risk environment; public instruments; levelized cost; and evaluation. Section 2.2 of the report provides a guide for selecting specific instruments to address the risks and barriers identified, and for quantifying their impact. To illustrate how the framework can support decision making in practice, it presents findings from illustrative case studies for large scale wind energy in four developing countries (Kenya, Mongolia, Panama, and South Africa).