Finance & Investment

Authoritative data and analysis to support reduce renewable energy investment

Investment Needs

IRENA's REmap: Roadmap for A Renewable Energy Future shows that doubling the share of renewables in the global energy mix (up to 36%) by 2030 would require on average USD 770 billion of investments per year between 2016 and 2030. Growth acceleration is therefore needed as investments will have to double before the end of this decade and grow further, to more than three times current levels in the 2020s.

Sources of Investment

Public finance, including climate finance, provides an important source of financing to bridge the financing gap and attract further investment to renewables. IRENA’s .comprehensive project-level data from public finance institutions aims to provide transparent, authoritative and relevant information on public investment flows. However, public finance is unlikely to be the main driver of new renewable energy investment.Institutional investors such as pension funds, insurance companies, endowments and sovereign wealth funds have the potential to scale up large-scale investments. . Furthermore, IRENA’s Sustainable Energy Marketplace showcases a number of financial instruments and funds available to source investment for individual projects.

Mobilizing Private investment

To address the question of ‘how’ to scale up renewable energy investment rapidly with financing from potential sources, IRENA has been engaging governments and the international investor community to identify key risks and barriers and examine the current financing landscape in the renewable energy sector. This work has culminated in a report “Unlocking Renewable Energy Investment: the Role of Risk Mitigation and Structured Finance,” which analysed various financial instruments and structures and suggested areas for actions. In its REThinking Energy 2017 report, IRENA has also developed a set of strategies from an institutional perspective, that would potentially help close this investment gap and ensure a rapid increase in renewable energy uptake through 2030.

Financing Renewable Energy Projects

Renewable energy projects especially in developing economies face multiple challenges from the institutional, policy and regulatory level to the market and project level. In order to improve the project quality and visibility in the market and to support early stage project development processes, IRENA has designed and implemented various tools and platforms.

The intergovernmental organisation strives, as one of its core activities, to “provide to its Members upon their request advice on the financing for renewable energy and support the application of related mechanisms” (IRENA Statute, Article IV, para. 1 (f)).

Through a range of work in the field of finance, the International Renewable Energy Agency (IRENA) has set out to:

1) Provide an authoritative data set and supporting analysis on renewable energy investment dynamics;

2) Facilitate project initiation, development and advancement via various platforms to improve project quality as well as access to finance.

3) Address barriers and risks for renewable energy investments via financial risk mitigation instruments and structured finance mechanisms to mobilize private capital and scale up investment.

Global renewable energy investment trends

Global investment in renewable energy has experienced unprecedented growth in recent years, and yet it remains below its potential. Scaled up renewable energy investment on the foundation of sound enabling policy framework is critical to rapidly mobilize sustainable energy transition. IRENA is working together with key players including policy makers, financial institutions and project developers, to help close this investment gap. Our activities focus on mobilising various sources of investment (including private capital) in renewable energy projects through the effective use of financial instruments and risk mitigation tools.


Related Work