Even when conduce policies are in place, clean energy investments still face high real or perceived residual risks in developing countries including off-taker risks, currency risks and political risks among others.
In emerging economies, specific technologies like geothermal or wind have different project phases with different risk profiles. Such risks are even inflated in developing countries and as a result, a large number of projects’ investment cycles could be improved with the provision of adequate risk transfer or risk mitigation instruments.
Commercial risk transfer instruments on the other hand are not always affordable, and in many cases not available at scale. The opportunity for blending public-private risk transfer/mitigation instruments to improve affordability has never been so real. Moreover, investors and project developers outside the financial industry find hard to identify, understand, compare, combine or even access risk transfer or risk mitigation instruments.
” The vision of Track 3 of the Climate Investment Platform is to declutter the overall space for access to risk-transfer and risk mitigation products and services in support of accelerating public and private sector investments in the energy transition.”
To develop an extensive registry of project preparation assistance, financing, and risk-sharing products and services from public and private providers, and to maximise the matching of the suppliers of such products and services with demand from developing country governments and the private sector.
To develop a toolkit and organize frequent workshops and webinars to improve understanding of standard vocabulary and contractual terms used in the industry, as well as to provide hands-on support in the preparation for applications to de-risking instruments and project preparation assistance.
Finally, to identify gaps in the services and instruments offer and engage providers to whenever possible improve or expand their offer to match demand, and as a last resource and upon eligibility to directly provide instruments and services using the CIP funding vehicle.
This track of the CIP will fulfil its vision and strategy through the following services under four main components:
Facilitation for access to risk transfer/mitigation instruments and preparation funding
Access to a structured, comprehensive and detailed database on project preparation facilities and public, private, and public-private risk transfer/mitigation instruments, including application processes and eligibility criteria information.
Matching of suppliers of de-risking instruments and project preparation services and funding with demand from developing country governments and the private sector.
Access to an online toolkit to help platform clients to understand the standard vocabulary and contractual terms used in the industry, as well as enhance their capacity for risk assessment and mitigation. Access to organized workshops and webinars on specific relevant topics and geographical areas to help clients understand better the risks they might face and the most appropriate mitigation solutions (for example depending on the technology, geographical coverage, type of risk to cover etc).
Direct offering of project preparation assistance and de-risking instruments by Network of Partners
Access to hands-on assistance and advisory services to help platform clients (developing countries and the private sector) understand and identify the appropriate options that are available tailored to their needs.
Access to direct provision of enhanced project preparation funding and risk mitigation and risk transfer instruments using a CIP listed funding vehicle, whenever a gap is identified in the track service offer by delivery partners and upon eligibility.