Funding Solar Projects in Cost-Sensitive Markets

There comes a time in life when you feel numb, and want to take a pause and reflect upon what just happened. This is that moment for me; after ten years of my professional life in #Maldives, The New York Times published an Op-ed illustrating how The World Bank's Maldives energy program is a template for developing countries on energy transition towards achieving net zero goals. It is exceptional for a leading international daily newspaper to highlight a particular program as a template for the whole world. It validates our team’s efforts and affirms the program's potential as a replicable, global framework for driving the #EnergyTransition toward #NetZero. https://lnkd.in/dK78TPG6 I first landed in the Maldives in 2013, as part of an initiative with the Asian Development Bank (ADB). The country's beauty was, and still is, unparalleled. But amid that beauty, I also saw a significant challenge: the Maldives imported $500 million of fossil fuels, accounting for a staggering 10% of its GDP. This already burdensome situation was further exacerbated by the global impacts of #CVOVID19 and the #UkraineWar, putting the nation under considerable fiscal pressure.   Our initial efforts in 2017 to address this challenge were through a small 1.5 MW #Solar project. The project attracted only four investors and led to a high tariff rate of 21 cents. This was a critical learning moment; it became clear that our focus needed to be more on #PrivateSectorEngagement rather than just implementing solar installations or combating #ClimateChange.   Recognizing this, we changed our approach. We developed a comprehensive three-tier #RiskMitigation framework and brought in partners like #IFC and #MIGA to boost investor confidence. The turnaround was remarkable. By 2021, a revised 5 MW solar project had attracted 25 investors at a much more affordable rate of 11 cents. By 2022, an 11 MW project garnered interest from 63 investors and drove the price down to 9.8 cents, even in the remotest areas of the Maldives.   This successful #StrategicShift had a multiplier effect. An initial investment of $12 million from the #WorldBank helped mobilize over $100 million, including significant #PrivateSector contributions. Let's not forget, achieving #GlobalNetZero will require a yearly investment of $2.5 trillion by 2030. Neither the World Bank nor the governments of India, the USA, or the Maldives have that kind of financial muscle. The real game-changers here are the #InstitutionalInvestors— #pensionfunds and #sovereignwealthfunds.   #NewYorkTimesOpEd rightly points out, that if the Maldives—a small, developing country—can successfully transition toward renewable energy, then others can too. Demetrios Papathanasiou, Ministry of Environment, Climate Change and Technology, Maldives, #AjayBanga, Guangzhe Chen, Faris Hadad-Zervos, Chiyo Kanda, Sreyamsa Bairiganjan, Barbara Ungari, Talal Kanaan, Chong Suk Song

"Rethinking the Role of Long-Term Investors in the Energy Transition" outlines the pivotal role that sovereign wealth funds (SWFs) and public pension funds (PPFs) can play in achieving a global energy transition. Investment Gap: • Global clean energy investments rose from $1.2 trillion in 2019 to $1.7 trillion in 2023 but fall short of the $4.6 trillion needed annually by the early 2030s to meet net-zero goals by 2050. • Only 0.4% of the $729 billion spent on global energy-transition infrastructure in 2023 came from SWFs and PPFs. Current Investments by SWFs and PPFs: • In 2023, SWFs invested $5.01 billion in renewable energy and $2.78 billion in EV/battery technologies. • Combined global assets under management (AuM) for SWFs and PPFs were $32.8 trillion at the end of 2023, with North America housing $12.8 trillion in PPFs. Focus Areas for Investments: • Emerging markets are underserved, receiving $236 billion of $1.7 trillion energy-related investments in 2023. Africa needs $277 billion annually but only attracts $30 billion. • Infrastructure needs include power grid expansions, renewable energy production, storage solutions, and access to critical minerals like lithium and cobalt. Three Investment Approaches: • Trailblazer: Early investments in high-risk markets. Example: Masdar’s floating solar plant in Indonesia and wind projects in Uzbekistan. • Whole-of-Life: Holding assets across their entire lifecycle. Example: GIC’s stake in Greenko (India) and Arctic Green Energy (geothermal projects in China and Europe). • Blended Finance: Combining private capital with concessional funding. Example: Temasek's $100 million mezzanine green loan for solar projects in the Philippines. Barriers to Investment: • Financial risks from varying cost of capital. • Geopolitical instability and trade barriers. • Lack of standardized data for energy-transition metrics. • Policy delays and bureaucratic hurdles. Potential Benefits: • Unlisted renewable assets have shown returns outperforming traditional infrastructure and listed benchmarks, with unlisted renewables delivering 299% total returns in emerging markets over nine years. • Investments in clean energy can support economic growth, create jobs, and improve energy security. Policy Recommendations: SWFs and PPFs should align strategies with climate goals, enhance collaboration with multilateral development banks, and leverage public-private partnerships to de-risk projects. SWFs and PPFs have the potential to close the energy-transition financing gap by strategically deploying their significant capital. This can enable not only economic returns but also global progress toward decarbonization. However, success requires addressing barriers like regulatory risks, fostering international cooperation, and innovating through blended finance mechanisms.

How Zambia Can Unlock Faster Solar PV Development Through Smarter Project Financing Zambia has no shortage of solar potential or capable Independent Power Producers (IPPs). What continues to slow down project execution is not technical expertise it is access to affordable, structured financing. Most local IPPs struggle with: • High interest rates • Short loan tenures that don’t match energy project lifecycles • Lack of bankable guarantees • Delays caused by currency risk and unclear risk-sharing frameworks Yet solar PV is not speculative infrastructure — it is proven, measurable and revenue-generating. Here is how Government and Banks can work together to change the story: 🔹 Government-backed credit enhancement Partial risk guarantees or sovereign-supported credit lines can significantly reduce lender risk and unlock local currency funding. 🔹 Dedicated Renewable Energy Desks in Banks Banks need specialised project finance teams that understand PPAs, EPC risk, grid constraints and energy cash-flow models. 🔹 Blended finance structures Combining development finance institutions (DFIs), commercial banks and government instruments reduces capital costs and accelerates financial close. 🔹 Local currency lending frameworks Allowing long-term kwacha-based financing protects IPPs from FX volatility and improves project bankability. 🔹 Standardised PPA & security packages Uniform documentation shortens due diligence timelines and builds confidence across lenders. Zambia does not need to reinvent the wheel. Countries that aligned policy, banking systems and renewable developers are now scaling solar at record speed. If we make capital easier to access, IPPs will deliver power faster and Zambia will reduce load shedding, strengthen energy security and accelerate economic growth. The sun is not the problem. The structure of capital is.

💰 $200 Million for Solar Projects In Africa That’s not aid. That’s corridor capital. India and France have launched a $200M initiative backed by multilateral organisation and international solar alliance. Most will read this as diplomacy. Serious players will read it as capital alignment. ⸻ What’s quietly aligning: • Indian solar manufacturing capacity expanding • Export flows being reshaped • Sub-Saharan Africa entering a structural solar + storage build phase • South Africa expected to add ~10 GW solar this decade • Storage increasingly embedded in new projects Now combine that with: ➡️ Blended finance ➡️ Sovereign comfort ➡️ ISA political umbrella ➡️ Execution-ready Indian companies This is not about shipping panels. This is about building project corridors. ⸻ Capital Changes the Risk Equation Emerging solar markets don’t stall due to lack of sunlight. They stall due to: • Bankability gaps • Early-stage development risk • Storage financing complexity • Structuring inefficiencies When catalytic capital enters, three things happen: 1️⃣ First projects become bankable 2️⃣ Private investors follow 3️⃣ A long-term corridor forms That’s where Indian companies step in. ⸻ And Here’s the Strategic Signal Several Indian solar players have already decided to exhibit at Solar & Storage Live Africa. That’s not coincidence. That’s positioning. Because the companies that win in Africa won’t just be suppliers. They’ll be ecosystem participants. • Developers • EPCs • Storage integrators • RESCO platforms • Capital partners Being physically present while capital structures are being shaped? That’s how first-mover advantage works. ⸻ 2026–2030 Is a Capital + Execution Window. Not an export window. If Indian manufacturing strength aligns with: • ISA-backed financing • African corporate PPAs • Utility tenders • Solar + storage bundling You’re looking at a multi-billion-dollar opportunity corridor over the next five years. ⸻ If you are serious about Africa solar positioning: Comment “EXPLORE AFRICA” I’ll show you available opportunities to network directly with Africa solar project developers at Solar & Storage Live Africa. This is about access. Not theory.

This is especially across Africa and emerging markets. And here they are..... > British International Investment (BII) backs solar developers and climate infrastructure using equity + concessional capital. They prefer startups with strong local partnerships and clear impact metrics. > FMO (Dutch Development Bank) funds commercial-scale solar projects through a mix of debt, equity, and guarantees. They look for proven pilots, bankable unit economics, and regulatory clarity. > Proparco (France) invests in solar IPPs and energy-access startups, often co-investing with DFIs. They prioritize scalable models that improve energy access while remaining commercially viable. What to do next: • Package your startup as “commercially viable + impact-driven” • Show clear revenue visibility, not just climate impact • Highlight how blended finance reduces risk for private capital • Prepare a concise data room (traction, unit economics, permits) Blended-finance investors fund prepared founders—not just good ideas. If you need more help on it, and how to structure your startup towards this, you can send me a message. I'm Miracle Ohama, A Fundraising Strategist for Early Stage Startups. I help founders find the best VCs, angel investors, and grants — and craft winning pitch deck that secure investment funds. Focused on Seed to Series A.

#Opportunity Utility-Scale Solar + BESS (LSS PETRA 5+ and beyond) The recent LSS PETRA 5+ tender (announced in September 2025) has awarded projects with a combined capacity of 1,975 MWac, with an estimated investment of over RM6 billion. This program, along with future LSS rounds, signals a clear government commitment to large-scale renewable energy. The integration of BESS is becoming a critical requirement for these projects to ensure grid stability and manage intermittency. Projects in this category will be 30 MWac and above, with a strong focus on both ground-mounted and floating solar. The CAPEX for utility-scale solar PV is expected to continue its downward trend, driven by falling PV module prices from China. An estimated CAPEX for a solar-only project could range from RM2.5 million to RM3.5 million per MWac. The addition of a BESS component, typically sized for 4 hours of storage (e.g., a 100MW solar farm with a 100MW/400MWh BESS), will add a significant cost. BESS costs are projected to fall, with forecasts suggesting battery prices could drop below USD 100/kWh by 2027, making these projects more economically viable. Financial models will need to be robust, incorporating a blend of debt (70-80%) and equity (20-30%). Key metrics will include the Internal Rate of Return (IRR), Net Present Value (NPV), and Debt Service Coverage Ratio (DSCR). Revenue streams will be based on a long-term Power Purchase Agreement (PPA) with a utility or a corporate off-taker. The PPA tariff will be highly competitive, as seen in recent LSS tenders. Financial modeling will also need to account for revenue stacking from BESS, such as providing grid ancillary services (e.g., frequency regulation, voltage support) to the utility. 2025 Project development, including finalization of PPA, land acquisition/leasing, and securing financing. Engineering, Procurement, and Construction (EPC) phase. Large-scale projects typically have a construction timeline of 18-24 months. Projects awarded in 2025 are scheduled to begin commercial operation by 2027.

🔆 The Role of Solar Policies in Driving Solar Project Development Strong government policies are the backbone of any successful renewable energy transition — especially for solar power. Here's how policy frameworks directly impact project development and funding: 1. Attracting Investment ✅ Clear, consistent solar policies build investor confidence by minimizing risk. ✅ A favourable regulatory environment attracts both domestic and international stakeholders. 2. Reducing Project Costs ✅ Subsidies and tax incentives lower the initial capital burden. ✅ Duty waivers on imported solar equipment reduce infrastructure costs. 3. Enabling Long-Term Planning ✅ Policy targets (e.g., 100 GW by 2030) give developers a roadmap for strategic growth. ✅ Stable frameworks encourage multi-year, large-scale project planning. 💰 Government Support in Solar Project Fundraising 1. Capital Subsidies ➡️ Upfront subsidies (20–40%) for residential and agricultural solar systems lower entry barriers. 2. Viability Gap Funding (VGF) ➡️ Bridges the gap between project costs and market-discovered tariffs, ensuring financial feasibility. 3. Renewable Energy Certificates (RECs) ➡️ Generate additional revenue through REC trading in energy markets. 4. Soft Loans & Low-Interest Financing ➡️ Offered through public banks and international agencies like the World Bank under government partnerships. 5. Feed-in Tariffs (FiTs) & Net Metering ➡️ Ensure fixed income by locking in rates for power fed back into the grid — boosting bankability. 6. Public-Private Partnerships (PPPs) ➡️ Risk-sharing ventures between government and private players accelerate infrastructure deployment. 🇮🇳 Case Study: India MNRE enables nationwide schemes and funding support. SECI facilitates solar park development, PPA guarantees, and project tendering. KUSUM Scheme empowers farmers through solar pump installations and financial support. ✅ Quick Summary Aspect Government Support Investment Subsidies, Tax Exemptions Fundraising Soft Loans, VGF, REC Trading Revenue Assurance Feed-in Tariffs, PPA's Risk Reduction Stable Policies, Public-Private Partnerships 🌞 Policies don’t just guide the solar industry — they fuel it. #SolarEnergy #RenewableEnergy #PolicySupport #Sustainability #GreenFinance #IndiaEnergy #CleanTech #ClimateAction