Finance Facilitation
A critical gap exists between financiers of village energy projects, local entrepreneurs and consumers. Financiers often perceive a range of risks associated with modern energy service projects and the technologies that power them and often lack the capacity to analyze these risks; leading to high transaction costs and the availability of a limited menu of financing options in many developing countries. Entrepreneurs require access to capital to help defray the often high upfront costs associated with developing modern energy service projects at the village level; assistance in the identification of financing sources and options; help in the preparation of the documentation required to access financing; guidance, know-how, and insights to navigate the inevitable challenges in the development and operation of projects; and a menu of financial options tailored to the risks specific to their projects. Consumers require access to affordable credit and dependable energy services at the village level.
The GVEP International service line seeks to bridge the gap among financiers, entrepreneurs and consumers with the goal of increasing investments in village energy projects and programs. Through a global dialogue, five finance-related products and services have been identified for GVEP International’s on-going support and activities:
• Entrepreneurial Strengthening: GVEP International is facilitating support to entrepreneurs in order to build local capacity in business planning and operational management to increase Energy MSMEs survival rate.
• Training for Finance Intermediaries: GVEP International is supporting the development of training programs for bankers, micro finance institutions and others to increase their awareness of and understanding the risks and rewards of clean energy projects.
• Financing Facilitation Portal: GVEP International links partners to a range of financing sources worldwide.
• Risk Mitigation Instruments:GVEP International is supporting the design of risk mitigation instruments in a number of countries.
• Leveraging Investment Financing for Energy-Poverty-Development Projects and Programmes: GVEP International is working with multilateral donors, bilateral donors, investors, foundations, private firms and other organisations to expand its financing and technical assistance services for its partners.