Browsing by Author "Bhattacharyya, Subhes"

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    Clean Energy Financing: Sources, Instruments, Risks and Mitigation Options,
    (Asian Development Bank, 2022-09-30) Bhattacharyya, Subhes
    As the international community prepares for urgent and unprecedented interventions towards a low-carbon transition, the global attention on clean energy projects takes the centre stage. Although investment in clean energy and energy efficiency has grown, there is a wide funding gap to reach the 1.5° C pathway. Accordingly, mobilising finance to support clean energy projects remains a major challenge. This chapter presents a review of the clean energy finance mechanisms and highlights alternative sources of finance, covering the traditional public sector led financing as well as more innovative options. It also presents a review of alternative instruments used in clean energy projects. Main risks to clean energy finance and options to mitigate them will also be reviewed. The chapter finally offers lessons from successful and not-so-successful projects. Although public finance has supported clean energy development initially, the private sector has an important role to play. Similarly, the international finance flow has supported the projects with grants and concessional finance but in the future domestic resources of finance will have to play a bigger role to bridge the financing gap. Accordingly, innovative ways of attracting domestic finance particularly through green bonds has received global attention. Similarly, large corporates have started to commit to a renewable energy transition and the corporate PPA is emerging as a new trend to support renewable energy projects. The global recession due to the recent pandemic has however brought new uncertainties in clean energy investment due to strain on public finance. The risk of managing the viability gap for clean energy projects remains a concern. The enabling regulatory environment is required to support clean energy investments and attract finance from national and international sources.