GOGLA sees a bigger role for public funding to play in energy access investments
The Global Off-Grid Lighting Association (GOGLA) recently released its industry opinion on a variety of topics. One of those opinions is on the role of public funding to mobilize investment for energy access. We’d like to highlight it here:
The members of GOGLA hold the view that public funding for energy access, including both development financing as well as international climate financing, should be used where it is most efficient and effective in reaching poverty reduction and climate objectives. Consequently, donors, development finance institutions and MDBs should vastly increase the amount of public funding for distributed energy access projects, and create the framework programs and facilities that enable this. At the same time, public funding institutions should develop strategies to encourage energy access investments by other actors, such as commercial investors. They should use their capacities to help create enabling business environments in the countries and achieve large-scale impacts.
Our work lies in the heart of energy access investments. Through Solar Empowerment Fund, SunFunder offers investors an opportunity to invest in a diversified, vetted portfolio of solar projects that tackle energy poverty in off-grid and grid-deficit markets. While we have worked with some institutional investors in growing our Solar Empowerment Fund financing activities, we also see the need for more public funding to get involved with energy access investment opportunities to achieve large-scale impacts.
Hence, we could not agree more to this particular recommended action put forth by GOGLA:
Collaborate with commercial banks and investors to mobilize financing through a wide range of financial products. Public financing (development as well as climate financing) should be allocated to leverage the available and potential commercial financing by absorbing investment preparation and transaction costs; de-risking investment; and reducing the cost of (commercial) capital.
As we have repeated again and again:
Over the next decade, solar energy will leapfrog the electricity grid in developing countries much like cell phones leapfrogged landlines. SunFunder is dedicated to financing this emerging solar market transformation.
We welcome all players to join us as we catalyze the solar ecosystem in emerging markets.
