The Asia-Pacific region requires an investment of nearly $1.7 trillion per annum in the energy sector between 2016 and 2030[4]. However, the region’s clean energy sector attracted a total investment of only $166 billion in 2018, according to Bloomberg NEF. These numbers indicate that there is a massive financing gap between current practice and the resources needed to meet the region’s clean energy targets.
This track will draw on the experience of project developers, entrepreneurs, governments and investors from across Asia. It will also draw on the experience of ADB and other development partners in identifying new niches and areas where catalytic finance can make a difference—through the support of new technologies, business models, and financing tools and mechanisms.
Topics will include, but are not limited to, the role of the government in enabling private sector participation; in championing pioneering and cornerstone projects; and in the development of new and innovative approaches to financing clean energy projects. Case studies, including examples of regional cooperation, will be presented throughout the track.
Abstracts should address one of the topics listed below:
Finance, Session 1: Global Trends in the Financing of Clean Energy
Developing countries across the globe are making an aggressive push toward a low-carbon economy and have set national clean energy targets. However, to achieve their targets, they will require huge capital investments and innovative mechanisms to unlock new sources of financing. This session will discuss global trends covering emerging ways of doing business in financing green and clean energy infrastructure.
The session will address the following questions:
- What are the current trends in project financing?
- What is the lender’s perspective, and how does this compare with the development imperative?
- How can we mobilize private sector investment for clean energy to meet the significant infrastructure investment requirements of developing countries?
- How can we address various issues such as standard power purchase agreements (PPAs) and problems related to bankability of the underlying transactions?
- How can we deal with stranded assets (for example, for some less-efficient thermal plants, or for older renewable energy technologies that are far less economical than today’s options)?
- What are the key challenges and success stories in the region?
Finance, Session 2: Role of Governments in Enabling the Financing of Clean Energy
Facilitating the region’s energy transition to a low-carbon economy will require innovative public finance mechanisms, particularly those that can be structured to leverage private sector financing. This session will discuss how the public sector can support the expansion and development of clean energy financing. It will provide an overview of Green Public Procurement and how to scale up green financing, and will also review a recent report by the International Energy Agency (IEA)* which highlights the fact that 70% of energy infrastructure falls under public sector financing.
The session will address the following questions:
- What financing instruments have been adopted by governments and inter-governmental agencies to support and enhance green infrastructure financing?
- What blended financing and climate financing instruments are available (e.g., the Climate Investment Funds and the Green Climate Fund)?
- How can we design effective tax incentives, carbon taxes, and other fiscal instruments and incentives?
- What are the lessons learned from the following types of financing initiatives?
- Sukuk (Islamic Bonds) for green finance
- Sovereign backed green project bonds
- Credit enhancement (IIFCL partial guarantee for credit enhancement in India)
- US tax-exempt bonds
*IEA. World Energy Outlook 2018.
Finance, Session 3: Financing of Large-scale Renewable Energy Projects
As we continue to drive the clean energy transition, it is important to discuss how to finance large-scale renewable energy projects. This session will focus on best practices for financing of solar parks, floating solar projects, solar rooftop and residential solar business models, and battery storage and virtual power plants. The session will also discuss financing of successful offshore wind projects.
The session will address the following questions:
- What types of financing mechanisms are currently available for large-scale renewable energy projects?
- What changes in policies and regulatory frameworks are required to spur higher levels of investments into such projects?
- How can project developers and investors structure investment models for large-scale projects that are burdened with additional costs related to transmission and interconnection, or ancillary construction costs, as in the case of offshore wind power?
- What are the key challenges and success stories in the region?
Finance, Session 4: Crossing the “Valley of Death”: Impact and Venture Capital Investments in Early-stage Clean Energy Firms
It is hard to cross the “Valley of Death” as an entrepreneur and to develop a company that can showcase positive results and demonstrate the ability to expand capacity to make impactful gains in the market place. This session will highlight challenges and risks faced by start-up companies in the clean energy industry, and highlight examples of how to overcome these obstacles.
The session will address the following questions:
- Why do clean entrepreneurs usually have difficulties acquiring capital?
- What types of partnerships are needed between businesses, researchers and academia on the one hand and public sector organizations on the other?
- How can typically conservative institutions with broader social objectives take more risk to support innovative companies?
- What are the key challenges and success stories in the region?
Finance, Session 5: Risk Mitigation and Disaster Risk Reduction/Insurance in the Energy Sector
Reducing financing risks will often increase the chance for attracting additional investment. This session will discuss the importance of reducing the overall risk for investors and financial institutions that are investing in clean energy projects.
The session will address the following questions:
- What types of green bonds, climate bonds and sustainability bonds are available?
- What are the mitigation instruments for geothermal, mini-grids battery projects, and climate risk?
- What types of insurance products are available to cover the performance risk for clean energy projects? Or to cover the increased risks of disasters related to climate change and extreme weather events and conditions?
- What are the key challenges and success stories in the region?