Driven by its cost-competitiveness, the share of renewable energy in the global energy mix can be doubled by 2030 using existing technologies if global investments are scaled up to at least USD 500 billion per year in the years up to 2020 and to some USD 900 billion in the years up to 2030.
While renewable energy investments have seen steady growth over the last decade, a more rapid scaling-up is necessary to meet climate and sustainable development goals. This entails building a strong pipeline of investment-mature projects, which requires addressing the perception of high risk, making investment volumes more attractive to large-scale investors, and improving market transparency through quality information on project profiles and available financing options.
A strong toolkit is available for policy makers, financial institutions and investors to overcome the investment constraints, improve access to capital and mobilise private sector investment in renewables. Sound policy frameworks backed up by financial guarantees can cover some of the most critical risk categories, lowering the perceived risks. In addition, an effective site appraisal can help characterize, qualify and screen potential sites, which saves project development costs by addressing site identification risk. Facilitating renewable energy projects from initiation to full investment maturity via online platforms and project preparation facilities can enhance project quality and visibility, leading to improved market liquidity. Furthermore, building on a standardisation of contracts and a simplification of the process to access funds, small-scale projects can be aggregated into larger bundles, thereby increasing investment volumes.
To this end, IRENA has been active in the development and implementation of a number of in-house tools and services that act as facilitators and catalysts (Annex 1). This work aims to engage the broad range of actors to jointly advance work towards a scale-up of renewable energy investment.
The purpose of this event was to identify the most critical obstacles for scaling up renewable energy finance and discuss ways to advance project pipeline development and financing, including IRENA’s tools and initiatives. The event also engaged experts from financial institutions and the renewable energy industry to discuss and explore options of scaling up renewable energy investment and attracting large-scale institutional investors, and to identify priorities for future work.