Mobilising private finance for clean energy in developing countries - Cecilia Tam, OECD

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BIAC-OECD Virtual Roundtable on mobilising private sector finance and investments for affordable and clean energy in developing countries, 26 October 2021

Environment

Mobilising private finance for
clean energy in developing
countries
1
9 November, 2021
Cecilia Tam
CEFIM Team
Leader

2
RE investment opportunities
*Colombia, India and Viet Nam exclude large hydro. Indonesia, Thailand and Philippines include large hydro as this is in targets.
** Installed capacity: 2021 for India and Colombia, 2020 for Viet Nam, Thailand, and Philippines, and 2019 for Indonesia
***Targets: Colombia 2034 plans, India 2030 targets, Indonesia 2030 plans, Viet Nam 2030 plans, Thailand 2037 plans, Philippines 2030 targets.
Current installed renewable capacity and targets for 2030-2037 in select emerging economies, GW
37 GW for 2030
31 GW for 2037
26 GW for 2030
21 GW for 2030
9 GW for 2034
0 10 20 30 40 50 60 70 80 90 100
India
Viet Nam
Thailand
Philippines
Indonesia
Colombia
GW
Hydro* Wind Solar Geothermal Bioenergy and waste Targets
450 GW for 2030
100 150 200 250 300 350 400 450
USD 600 bn
needed annually
under SDS,
rising to USD 1
trillion in NZE by
2030 for
emerging and
developing
economies (IEA).

CEFI Policy Review of Indonesia
Key recommendations
• Strengthen and expand energy efficiency regulation
• Streamline and standardize PPAs and ensure
transparency
• Shift to public, competitive tenders for renewables
• Support corporate and sub-regional green bonds
• Align sustainable finance definitions across sectors
and economic plans
• Assistance for project preparation and structuring
• Development funds for private capital mobilisation
Download the report

Development finance in blended finance should facilitate the
unlocking of commercial finance
to optimise total financing directed towards development outcomes.
PRINCIPLE 2: DESIGN BLENDED FINANCE
TO INCREASE THE MOBILISATION OF
COMMERCIAL FINANCE
OECD Blended Finance Principle 2
2.A Ensure additionality for crowding in commercial finance.
2.B Seek leverage based on context and conditions.
2.C
Deploy blended finance to address market failures,
while minimising the use of concessionality.
2.D Focus on commercial sustainability.

RE risk evaluation in Viet Nam
Note: OECD analysis based on interviews with a domestic bank, foreign bank and regional RE project developer Download the report

6
Financing instruments for clean energy
In use
Under development
Not in use

• Credible and predictable policies and regulatory support where needed
• Increase access to long term capital and develop local capital markets
• Innovation in business models and financing (including Fintech)
• Strengthen capacity across government, project developers and financial
institutions to structure and develop pipelines of bankable projects at scale
• Expand use of blended finance models to help de-risk projects
• Improve conditions for “green finance” – reduce risks & transaction
costs; enhance transparency & disclosure; taxonomies
Attracting private capital to emerging economies

For more information please contact:
Cecilia Tam, CEFIM Team Leader
Cecilia.Tam@oecd.org
8
Please visit our webpage:
www.oecd.org/cefim/

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