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Private financing of renewable energy: A guide for policymakers

This guide provides an outline of how financing renewable energy works, with a particular focus on more mature end of the market i.e. the proven technologies that can be deployed now and at scale. It aims to show how policy looks and where it fits in from a financing perspective; as well as the range of other factors that need to be taken into account in doing an actual project or deal. The guide was produced by Chatham House, the United Nations Envirornment Programme (UNEP)’s Sustainable Energy Finance Initiative (SEFI) and Bloomberg New Energy Finance.

A broad range of financial institutions are now investing or lending money into the renewable energy sector. Global investment grew exponentially from $22 billion in 2002 to $155 billion in 2008 when, for the first time, investment in new renewable energy power generation capacity (including large hydro) was greater than investment in fossil fuel generation. The financial crisis in late 2008, first quarter 2009 did hit the sector heavily, although a bounceback was subsequently observed, and investor interest in the sector remained throughout (discussed below).

This guide covers:

  • how finance generally works;
  • what the different parts of the finance sector do;
  • what issues financiers consider when investing, including the role of policy and regulation; and
  • the challenges that face those seeking financing for renewable energy developments.
  • Certain complementary topics, such as carbon or ‘climate’ finance, including the use of public finance to leverage private finance in developing countries, have not been addressed in this guide, however, reports are available in this area.

Read the publication here: Private financing of renewable energy: A guide for policymakers.