ABSTRACT
This chapter addresses the following question: How can public resources catalyse private investment into climate solutions? It narrows the question to focus on the renewable energy (RE) sector, especially solar. The chapter provides analytic frameworks within which these can be discussed – in terms of global macroeconomic trends and the variations in the evolution of the climate finance and RE ecosystem in different countries and the variations in country needs, and hence of the type of finance needed, which could range from grants, equity, debt and guarantees to a combination thereof. This chapter focuses on the following: solar energy finance; how public finance catalyses private sector finance; merges the analytic framework with the impact of price decline of RE technologies on climate finance and the different levels and types of climate finance needed in different kinds of countries. To meet the challenge of scaling solar, especially in least developed countries and small island states, the International Solar Alliance (ISA), a treaty-based organisation with 119 member countries, has set up a blended finance, global solar facility, with the first regional facility in Africa with a local fund manager, bringing together public and private finance as well as multiple risk mitigation products such as guarantees, interest-free insurance loans and technical assistance for creating an enabling regulatory environment.
