Innovative Ideas Revealed To Stimulate Investment in Clean Energy

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Finance for Resilience (FiRe) selects 12 ideas with significant potential to increase global investment in clean energy

Bloomberg New Energy Finance

The pre-selection panel of Finance for Resilience has revealed a list of 12 promising ideas to accelerate the flow of finance for clean energy worldwide. Finance for Resilience (‘FiRe’) is a non-profit initiative run alongside the Bloomberg New Energy Finance Summit which aims to identify promising interventions based on scale and feasibility. The panel convened on 14 March to choose 12 finalists from 26 initial submissions. These will be invited to present at the Bloomberg New Energy Finance Summit, when the six winners will be selected.

VIDEO: Promotional video of the Bloomberg New Energy Finance Summit

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FiRe targets interventions that would stimulate new investment at the $1bn-a-year level, or higher. The chosen ideas show innovative approaches for tackling barriers to financing clean energy projects or technologies, anywhere in the world. They include public-private capital provision, insurance for power purchase agreements, bringing green bonds into the mainstream and other instruments. They are split into three streams: i) Risk management, ii) Scale & aggregation, iii) Securitisation.

The 12 finalists will pitch the ideas at the forthcoming Bloomberg New Energy Finance Summit, which takes place at the Grand Hyatt in New York, 7 to 9 April 2014. Summit attendees will vote for six overall winners, develop the ideas further in dedicated break-out sessions and participate in the future progress of the intervention. The core FiRe team will track progress until the next Summit in April 2015 and beyond.

Michael Liebreich, chair of Finance for Resilience, said, “The pre-selection panel had a very tough job, whittling down 26 excellent entries to the 12 which will present at the Bloomberg New Energy Finance Summit. These ideas have real potential to increase the flow of finance to clean energy at scale. What is particularly exciting is that most of these ideas revolve around private finance, supported by limited public money, and no subsidies. Investors are really asking for barriers to be removed, in order to develop new billion-dollar investment channels. The next stage is crucial – we must turn the best of these ideas into action.”

Janis Hoberg, project leader for Finance for Resilience, said, “I was impressed by the level of creativity of the submissions. The top 12 have a global focus covering developed and emerging markets. They address the need for financial innovation, the structural challenges of the energy market and the unique problems of energy access in the developing world. We are excited to help them contribute to a cleaner energy future.”

INTERVENTION SHORT-LIST

Stream 1: Risk management

• Establish monoline guarantees for green bonds by raising equity finance for dedicated entity

• Leverage public finance in multiple layers to bring clean energy to emerging markets, applying a first loss mechanism

• Launch geothermal drilling output insurance to exploit large untapped resources of a low-carbon energy source

• Make power plants bankable with insurance with a dedicated re-insurance fund freeing up the capacity of existing PPA insurers

Stream 2: Scale & aggregation

• Fire up finance for energy efficiency by making energy audits a lending requirement of local commercial and development banks

• Set up a non-profit business renewables resource centre to enhance non-energy company clean energy procurement

• Boost energy access in Africa with an integrated country-level framework that lays out the path to 100% clean energy

• Create the investment ecosystem necessary to establish the infrastructure to finance the global solar market

Stream 3: Securitisation

• Catapult volumes of four green bond types to the next level through the elimination of policy and educational barriers items

• Remove fossil fuel subsidies by implementing a tool that replaces them with credits for clean energy technologies

• Develop a sustainable credit rating system to reduce borrowing costs for infrastructure projects that reduce energy demand

• Create a debt fund to scale prepaid energy access by financing working capital for energy service providers

ABOUT FINANCE FOR RESILIENCE
Launched in October 2013, Finance for Resilience (or ‘FiRe’) is an open and action-oriented platform that brings together leading clean energy experts to characterise and implement solutions to close the finance gap in the sector. Investment in clean energy fell for the second consecutive year, with the $254bn total substantially lower than the level required to address climate change. The Finance for Resilience platform will address this problem, identifying and developing the best ideas for new clean energy investment. The platform targets ideas at the $1bn/yr+ scale. FiRe is supported by Bloomberg New Energy Finance.

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