The Commonwealth Guide to Public and Private Sector Financing for Clean Energy

Cover image of the Commonwealth Guide to Public and Private Sector Financing for Clean Energy

Investment in clean energy and infrastructure needs to substantially increase in the coming years in order to improve access to sustainable energy and limit global temperature rises. Yet clean energy investments in some developing countries, and especially in least developed countries, face significant risks related to issues such as lack of economies of scale, geographical remoteness, low credit ratings and lack of a strong financial sector and capital markets. Public finance and the use of blended finance can assist in de-risking such investments, making them more attractive to funding from commercial and private sources.

This guide aims to support Commonwealth member countries to access this finance by offering a compendium of regional and international sources of finance from private and public sector financial institutions for clean energy programmes and projects. It also includes a taxonomy of different financial sources, instruments and stuctures; a breakdown of the key requirements, success factors and common pitfalls that applicants for clean energy finance should keep in mind; and case studies of project applications.

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Background and context

In a world where the energy sector is responsible for two-thirds of global greenhouse gas (GHG) emissions (IEA 2022), there are still 733 million people who do not have access to electricity and 2.4 billion people who do not have access to clean cooking (IEA 2021).

To meet the Sustainable Development Goal 7 (SDG7) of universal access to affordable, reliable and modern energy services and be on track to achieving the climate goals of the Paris Agreement, greater investment in clean energy is needed.

These goals require a tripling of clean energy and infrastructure investment in advanced economies and quadrupling in emerging and developing economies, to US$4.2 trillion per year by 2030 (IEA 2022). To achieve net zero by 2050, 80,000 terawatt hours (TWh) of power generation at a cost of US$194 trillion is required (BNEF 2022).

With such a significant investment financing requirement, mobilising finance for greater investment in renewable energy and its distribution and transmission, clean off-grid energy, energy efficiency, and clean energy storage is vitally important. This investment is critical to rapidly reducing emissions, improving access to clean energy, and accelerating the energy transition to achieve SDG7 and limit the global temperature increase to 1.5oC.

The inability to access clean energy finance directly and indirectly is a fundamental issue of climate justice and a just energy transition. To address the financing gap and boost clean energy investment, both public and private sector financing will be required.

Clean energy investments in some developing countries, and especially in least developed countries (LDCs), face significant risks related to lack of economies of scale, geographical remoteness, low credit ratings, lack of a strong financial sector and capital markets, and political, currency and counterparty1 risks.

Public finance and the use of blended finance can assist in de-risking clean energy investments, making them more attractive to funding from commercial sources, including private financing sources.

To support Commonwealth member countries in accessing this finance, there follows a compendium of regional and international sources of finance from private and public sector financial institutions for clean energy programmes and projects.

The compendium will, in the near future, be made available by the Commonwealth Secretariat as a live electronic resource that is updated regularly to facilitate greater access to clean energy finance and support the development of proposals by Commonwealth member countries targeted at relevant sources of finance.


1. The risk that a party to a contract will not meets its obligations under the contract. [back to text[

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