Syndicate for Renewable Energy Infrastructure Financing | Climate Finance, Uganda 2018
SEED Practitioner Labs Climate Finance in Uganda engaged financial institutions, funders, intermediaries and other SME ecosystem stakeholders over a multi-step process to co-create innovative climate finance products and mechanisms that extend access to long-term financing opportunities for “missing middle” small and growing climate-smart enterprises that struggle to advance beyond the start-up stage and multiply their contributions to climate-smart and socially inclusive economies.
The syndicate for renewable energy infrastructure financing solution developed by the UNFCCC Regional Collaboration Center - Kampala contracts a community of interested debt and equity lenders to finance household RE projects. It enables and leverages syndication effects to increase the number of new financial partnerships, raise debt in the RE sector and multiply returns on investments. Investors are legally bound in the syndicate, which finances RE infrastructure projects based on comprehensive project analysis, due diligence and evaluation. High ROI potential projects receive financing through insurance, blended financing or otherwise, depending on the financing service offerings of member financiers. The syndicate supports RE infrastructure projects to plan project implementation and schedules payments accordingly. This innovative syndicate will:
- Secure the buy-in and share risks among private sector actors (especially infrastructure insurance companies) in blended syndication to build a pool of interested lenders who finance ongoing projects for off-grid infrastructure development;
- Multiply returns on investments in off-grid RE for household use by pairing syndicate members with off-grid energy experts to fortify knowledge-sharing and long-term partnerships which reduce investors’ risk aversion.
