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< prev - next > Energy CA_Toolkit PAC SmartFinal (Printable PDF)
Bilateral agencies
Developed countries provide funding for developing countries through development
programmes such as the UK Department for International Development (DFID), the
United States Agency for International Development (USAID). There are a number
of bilateral donors, notably USAID, DGIS (Netherlands), KfW (Germany) and SIDA
(Sweden) who have included renewable energy technologies in their programmes
and projects. Funding is generally only made available for governments although
certain opportunities exist for NGOs and are generally advertised via their websites
and local offices.
National institutions
In most countries the government is supposed to provide a range of basic services
including electricity, the reality is that neither local nor central governments provide
that services, generally because lack of money and because they do not see the
poor and/or isolated as a priority.
Local investment
Commercial financing organizations, such as agricultural or development banks,
are able to provide finance for energy projects given a compelling business case
can be made. Error! Bookmark not defined. Investment from these sources is currently not
significant since loans are expensive (local market conditions apply in terms of
payback period and interest rates, which can often be high), members of staff are
not trained to assess energy projects, and they are not interested in small projects
because the transaction costs are high.
Social investment
There are a growing number of sources of finance specifically for enterprises that
provide social benefits and target poverty alleviation. Some of these are specifically
for energy enterprises.
E+Co provides business development support with both debt and equity
investments to small and growing clean energy businesses in developing
Acumen Fund is a non-profit venture capital fund with a focus on
delivering affordable, critical goods and services – like health, water,
housing and energy – through innovative, market-oriented approaches.
They aim to combine small amounts of philanthropic capital, with large
doses of business acumen, to build enterprises that serve vast numbers of
poor people. Acumen Fund has projects in East and Southern Africa.48
The Sustainable Energy Finance Directory is a free-of-charge online
database of lenders and investors who actively provide finance to the
sustainable energy sector worldwide, although their focus is on developed
Ecobank Foundation finances social projects in Africa. Ecobank sets
aside 1% of group’s profits after tax to support social initiatives. Ecobank
Renewable Energy to Reduce Poverty in Africa