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The Role of Policy in Scaling Private Sector NDC Finance

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Presentation on theme: "The Role of Policy in Scaling Private Sector NDC Finance"— Presentation transcript:

1 The Role of Policy in Scaling Private Sector NDC Finance
Wednesday, June 12th, 2019

2 Rules for Private Sector Engagement in NDC Finance
The private sector considers the RISKS vs the RETURN (profit) for specific investment opportunities: Attracting the private sector into NDC finance requires RETURNS that are adjusted for RISK

3 Low Carbon Investment Opportunities often do not offer an attractive Risk Adjusted Return

4 Making Markets: Policy Matters

5

6 Despite steep declines in the cost of clean energy, important barriers to investors remain, especially in sub-investment grade countries. Regulatory Policy Fiscal Policy (*) indicates that the intensity has been qualitatively determined (N/A) indicates data not available

7 Procuring Renewable Energy in dynamic markets: Understanding Good Enabling Environments
Key Market Attributes for Corporate Procurement Direct Power Purchase Agreements (PPAs): This enables producers to sell green power directly to consumers “Wheeling”: Wheeling enables project developers and offtakers to “rent” space on the grid to move electrons from the producer to the consumer Cost-leveling mechanism or policy(ies): e.g. Feed in Tariff, Avoided Cost Tariffs, Tax Incentives “Self Generation” and Net Metering: Enables on-site, behind the meter generation, e.g. rooftop solar So what makes a good regulatory and enabling environment for renewable energy?

8 Current RE Procurement Policies
India Indonesia Philippines Vietnam Wheeling FiT &/or Tendering Avoided Cost Tariff Behind the meter/Net Metering Direct PPAs Tax Incentives Source: Allotrope Partners, 2016

9 How Can Policy Makers Facilitate Investment?


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