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Renewables

Developing country governments are increasingly recognizing the role that public-private partnerships (PPPs) can play in delivering these projects in an efficient and timely manner. PPPs can leverage private capital and innovation to deliver workable renewable projects and can allow governments to share some of the significant risks associated with these projects with the private sector. PPIAF has been providing technical assistance to governments to help PPPs in this increasingly important sector become reality. For these PPP projects to be successful, governments must play a pivotal role in ensuring that the correct enabling environment is created, and that the deals are efficiently structured to ensure that private sector investment and participation is properly harnessed. For example, governments need to focus on the following:

Establishing a suitable regulatory framework that can govern the energy sector and provide a stable legal environment for renewable projects
Ensuring renewable projects have sufficient "payment-certainty" in the form of long-term Power Purchase Agreements with power companies and utilities
Creating a tariff structure (e.g., through feed-in tariffs) that promotes the increased prevalence of renewable energy sources in the energy mix
Sharing or bearing the risks that if borne entirely by the private sector will make renewable projects prohibitively expensive—e.g., exploration and field risks

PPIAF has been providing technical assistance to governments to help with addressing these challenges.

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