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Case Study

Philippines President Gloria Macapagal Arroyo is shown the feedstock that will be used to fuel the power plant by Asea One CEO Paul Rodriguez. Aklan Provincial Governor Carlito Marquez is in the background.

"CTI PFAN brings all the necessary services and resources to turn [clean energy] projects from mere concepts into reality. We are glad that the Philippines government can be a part of the process."
- Mario Marasigan, Asst. Sec. of Energy

Challenge

Scaling up clean energy will be essential for promoting low-carbon development over the coming decades, particularly in Asia where energy demand is growing rapidly. One major hurdle to the large-scale deployment of clean energy has been the significant gap between traditional investors and clean energy project developers, particularly small-scale projects. The challenge can be broken down into two fundamental barriers: First, the majority of project developers do not have access to investors, nor do they understand the criteria upon which investors make decisions. Second, investors who are willing to finance clean energy projects do not have the local knowledge or the technical expertise to assess a clean energy project's viability. Given both of these factors, major opportunities for addressing climate change in Asia have been slow to take off.

Initiative

USAID is playing a lead role in expanding the Climate Technology Initiative's Private Financing Advisory Network (PFAN)-a global, multilateral public-private partnership dedicated to reducing greenhouse gas emissions by "bridging the gap" between cash-strapped clean energy projects and investors. PFAN targets small-scale projects that, unlike large energy investments, are typically unable to secure financing. USAID supports PFAN in Asia and globally as it seeks projects that are innovative and socially responsible, have a high potential for mitigating harmful gases, and have a strong management team. For these projects, PFAN not only provides the crucial link with investors, but also a range of coaching and mentoring services, including business plan and strategy reviews

Results

In Asia to date USAID has achieved a leverage of 90 to 1 with a total of $185 million in PFAN-supported deal closures. USAID has recently established in-country PFAN networks in Indonesia, the Philippines, China, and India, and has mentored more than 80 clean energy projects since 2009. Combined, these projects will avoid 7.4 million metric tons of CO2 equivalent over project lifetimes, roughly the same as taking nearly 1.3 million cars off the road for a year.

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