Renewable Energy Projects for Sustainable Development: Financing Options and Policy Alternatives

CIGI Paper No. 122

March 23, 2017

To further the dissemination of decentralized renewable energy in order to address climate change and access to energy in developing countries, finance is needed.  This paper presents a summary of available options for financing renewable energy development and alternatives for policy implementation to support this process. Debt and equity financing options are highlighted and selected policy frameworks for promoting investment in renewable energy project (REP) development are discussed as well. Specifically, the paper uses case studies of renewable energy programs in three different countries to examine financing possibilities and policy options for governments developing renewable energy programs. The renewable energy programs investigated in this study are the feed-in tariff program in Ontario, Canada, the clean energy auction program in Mexico and the renewable energy independent power producer procurement program in South Africa. While the three programs share a number of similarities, there are also some differences, in particular in the design of the renewable energy programs.              

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About the Authors

Chijioke Oji is a post-doctoral fellow at the School of Environment, Enterprise and Development at the University of Waterloo. His current research focuses on developing innovative financing models for small and medium-scale renewable energy projects to alleviate the energy access challenge in developing countries and foster decentralized renewable energy production in developed and emerging economies.

Olaf Weber is a CIGI senior fellow and an expert on sustainability and the banking sector. He is currently a professor in the School of Environment, Enterprise and Development at the University of Waterloo and a University of Waterloo Research Chair in Sustainable Finance.