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SEI brief

Matchmaking power: expanding climate finance for off-grid solar electricity

This brief explores the development and climate benefits of OGS; the opportunities it represents for climate finance institutions, including multilateral climate finance mechanisms; and the potential impact of new funding sources such as blended finance, carbon markets, and the labelled bond market.

Gregor Vulturius, Heidi Tuhkanen / Published on 22 April 2020
Download  Read the brief / PDF / 765 KB

Vulturius, G. and Tuhkanen, H. (2020). Matchmaking power: expanding climate finance for off-grid solar electricity. SEI Discussion Brief, April 2020. Stockholm Environment Institute, Stockholm.

The analysis focuses on stand-alone off-grid solar technologies such as solar lanterns, multi-light systems and solar home systems, which together account for about 85% of the global off-grid electricity market. It is based on a comprehensive literature review and interviews with experts.

The authors discuss the development benefits of off-grid solar, the climate mitigation benefits, the benefits for adaptation and resilience, investment needs and challenges, and multilateral climate finance, and finally lended finance, carbon markets and bonds.

The brief sets out key strategies for climate finance to scale up investments in off-grid solar, as follows.

  • offer more concessional financing for early-stage business and market
  • expand the use of blended finance to de-risk investments and crowd-in
    commercial equity.
  • help off-grid solar companies to access local-currency loans.
  • establish a uniform methodology to assess the climate benefits of off-grid solar, and
  • mobilize debt finance from the labelled bond market for off-grid solar companies.

Read the brief / PDF / 765 KB

SEI authors

Heidi Tuhkanen
Heidi Tuhkanen

Senior Expert (Green and Circular Economic Transformations Unit)

SEI Tallinn

Topics and subtopics
Energy : Renewables / Climate : Finance
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