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Financing green power projects in the tropics
21/6/2023
8 min read
Feature
Small Island Developments (SIDs) – in the Indian Ocean and Pacific – typically faced an uphill struggle to raise finance for green energy projects. But prospects are improving, reports Selwyn Parker.
When the Maldives, a string of 185 islands in the Indian Ocean, launched its ambitious Aspire solar development project in 2014, only four lenders were prepared to risk their money, worthy though the scheme was.
Six years later this had all changed. In 2020, no less than 25 bidders lined up to support the next phase in the islands’ solarisation project that is part of a goal of becoming net zero by 2030. By 2022 it changed again as the financing became more sophisticated and the participants gained more experience.
‘Buoyed by the risk mitigation structure, there was a record 63 bids in 2022,’ reports the World Bank. Lenders were piling in. In one tranche of funding, the World Bank’s $12.4mn was leveraged to $140mn by other investors.