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Finance Mechanisms for Lowering the Cost of Renewable Energy in Rapidly Developing Countries

Finance Mechanisms for Lowering the Cost of Renewable Energy in Rapidly Developing Countries

Full Title:  Finance Mechanisms for Lowering the Cost of Renewable Energy in Rapidly Developing Countries
Author(s): David Nelson, Gireesh Shrimali
Publisher(s): Climate Policy Initiative
Publication Date: January 1, 2014
Full Text: Download Resource
Description (excerpt):

 

Renewable energy financing in emerging economies faces particularly daunting challenges, but there are creative policy solutions that could potentially reduce the cost of renewable energy support by as much as 30%. In this series, we look at two potential solutions:

• Reduce the cost of using debt sourced from the developed world: Index renewable energy tariffs to foreign currency, in so doing eliminate the currency hedging costs that are responsible for the largest share of the difference between developed world and rapidly emerging country debt costs.

• Improve the cost-effectiveness of domestic renewable energy support programs: Provide lower-cost debt through debt concession programs, which our research shows could lower the total cost of providing required support.

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