Access to financing is a key constraint for sustainable private sector growth in the renewable off-grid energy sector in developing countries. The challenge is especially apparent in clean small scale rural electrification projects in remote areas of Africa, Asia and Latin America, where the upfront capital investment especially for advanced renewable energy technologies can be relatively high compared to available funds of local households and enterprises. Therefore, Alliance for Rural Electrification mentions that financing programmes need to rely on institutional capacities available locally, and must be able to work closely with these local players at the different stages of project development. Despite often existing challenges, holistic and commercially viable business models with successful financing schemes are being implemented by members of the Alliance for Rural Electrification (ARE) in a multitude of settings and countries.

 

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