Catalysing Early-Stage Investment – Addressing the Lack of Early-Stage Capital for Low-Carbon Infrastructure in Developing Economies

This analytical report highlights that while public finance is already playing a significant role in the low carbon sectors, most of the money is targeted at the late-stage construction finance phase once most of the project development risk is removed. It notices that more can be done direct regarding financial flows to the early-stage project development phase using both investment and non-investment approaches. The report considers this Early Stage Financing Gap, examines the few public programmes currently addressing this issue in the renewable energy sector and proposes a significant scaling up (8+ times) of the capital allocated to this area. The amounts required are small in the context of existing and projected public financial flows to the low-carbon sector in developing economies, but the catalytic impact would be significant.