Unlocking clean energy investments through financial de-risking instruments

Abstract

This Master’s thesis investigates how the barriers that prevent the practical implementation of financial de-risking instruments for clean energy projects in emerging markets and developing economies (EMDEs)1 can be overcome. Based on expert interviews, five barriers that hinder the implementation of financial de-risking instruments for clean energy projects in EMDEs have been identified. To overcome these barriers, four required changes are presented: the standardisation of instruments and processes, enhanced donor education, stronger orchestration and alignment of stakeholders, and the improvement of the project pipeline. This thesis discusses that while the limited utilisation of financial de-risking instruments may not represent the primary bottleneck for mobilising private capital towards clean energy projects in EMDEs and scaling the application of these instruments is not a primary focus amongst experts, the changes identified through this research remain relevant. They address broader, systemic barriers faced by investors, facilitate private capital mobilisation, and promote the wider adoption of clean energy technologies.