Results-Based Financing

Context

Getting to 100 percent energy access by 2030 is a monumental challenge that requires off-grid energy projects to be developed at speed and scale. 

Current efforts to electrify rural communities with mini-grids and solar home systems and to implement clean cooking solutions are slow to implement. A big reason for this has to do with how electrification and clean cooking projects are developed.

Existing procurement models for energy access projects can be time-consuming and impose high administrative costs and burdens on governments, donors, and project developers.

An alternative to traditional procurement models is results-based financing. This model is proven to deliver connections faster and more efficiently. Governments and donors offer grants to project developers that are paid upon delivery of energy connections. Thus the risks of delivery are shifted to the private sector while companies are incentivized to build at speed and scale.

We believe that a paradigm shift to results-based financing can help put the world on track to achieving SDG7, which is why we launched the results-based Universal Energy Facility in 2020.

Activities

• Provide a funding mechanism that allows for scale, speed and efficiency to achieve universal energy access by 2030 through the Universal Energy Facility.
• Increase awareness and adoption of results-based financing for energy access projects among government and the finance and development communities.

Projects and initiatives

• Universal Energy Facility