13 July 2015: A report released by the Finance Committee of the Sustainable Energy for All (SE4All) Advisory Board recommends ways for increasing the world’s investment in sustainable energy. The report lays out a path to raise US$120 billion in clean energy investment by: developing the Green Bond market (US$35 billion); deploying de-risking instruments to mobilize private capital alongside public funds (US$30 billion); encouraging construction-stage and late-stage lending from institutional investors (US$30 billion); and creating structures to aggregate small-scale projects (US$25 billion).

The report, titled ‘Scaling Up Finance for Sustainable Energy Investments,’ was launched 13 July 2015 in Addis Ababa, Ethiopia, at the Third International Conference on Financing for Development (FfD3), which is focused on funding the post-2015 development agenda. The authors caution that the means identified in the report are not enough to reach the estimated annual investment of US$1-1.3 trillion needed to meet all three SE4All goals on energy efficiency, energy access and renewable energy, but are “near-term, achievable opportunities.”

The report identifies various best practices, examples and underused innovative financial instruments for raising the potential US$120 billion. The authors encourage: focusing on driving fresh capital into the project bond market and asset-backed Green Bonds; tailoring structures that allow the private sector to co-lend alongside Development Finance Institutions (DFIs) in emerging markets; employing insurance products to remove specific risks; bundling and pooling small-scale projects; and using subordinated debt credit enhancement instruments.

SE4All CEO Kandeh Yumkella highlighted that much of the battle is managing risk for the private sector, saying, “A trillion-dollar investment need is also a trillion-dollar investment opportunity.”

Anita Marangoly George, Senior Director for Energy and Extractives for the World Bank Group, underlined the importance of enabling environments, explaining that while a diverse pool of investors are ready to finance projects, “we must work hard to support governments with their reform efforts” to create certainty for financiers.

Bank of America Merrill Lynch, the Brazilian Development Bank (BNDES) and the World Bank prepared the report with input from Finance Committee members representing government, private and civil society institutions. [SE4All Press Release] [UN Press Release] [Publication: Scaling Up Finance for Sustainable Energy Investments] [UN Secretary-General Remarks at FfD Side Event] [SE4All FfD Side Event Announcement] [IISD RS Story on FfD3]