Clean energy investment can expand energy access, reduce emissions and power green growth in developing countries. But deploying clean energy technologies requires significant capital, especially in these markets. While the whole world needs to triple its clean energy investment, developing countries actually need seven times more clean energy investment compared to current investments.

However, investors, developers and utilities struggle to identify appropriate financing, and markets are choked by systemic barriers and high costs of capital. Moreover, countries vary widely in terms of policy environments, financial conditions and more.

To help address the shortfall in renewable energy finance and investment, WRI has been developing an approach to help policymakers and investors consider a set of themes and identify relevant financing types and sources that can enable a given country’s clean energy deployment.

Financial instruments are not one-size-fits-all. WRI researchers set out to develop an approach to break down the barriers and tailor financing instruments and policy interventions to the specific needs of a situation. These efforts— a collaboration involving staff with expertise in finance and energy and across WRI country offices — have resulted in an approach, effectively piloted in Colombia and Rwanda, for facilitating discovery of barriers, possible fixes and appropriate financing. The approach includes a series of questions that assist in mapping regulatory, identifying financial and institutional barriers, and aim to surface solutions adapted to the national context. By linking specific risks to targeted responses, the approach provides a structured pathway to strengthen investor confidence and unlock financing.

How to Discover Clean Energy Finance

To support decision-makers, WRI’s question-approach assesses the maturity of a technology and the readiness of a country’s market, thereby pinpointing gaps and narrowing down effective financing options. Further rounds of analysis focus on how the project can generate revenue and where costs will come from. Taken together, the results generate a path to viable financing.  

The technology maturity assessment is based on a framework developed by Sattva Consulting that rates the development stage of technologies.

The market readiness assessment involves questions about a country’s policies, regulations and institutions, all of which contribute to conditions conducive to clean energy investment. Bloomberg New Energy Finance’s 2024 ClimateScope market assessment tool is also employed to augment these responses.

Once these analyses are completed, users answer additional questions to assess revenue, costs and financing options, and how they should be “stacked” in relation to one another.

Where gaps or inadequacies in the capital stack are identified, more questions can help lead stakeholders to suggestions for alternative or supplemental financing sources, as well as policy and institutional fixes for the medium- to long-term. For example, examination of the revenue side might dig into whether there is a creditworthy offtaker and then suggest if a partial risk guarantee is needed as part of the financing mix. On the cost side, if permitting is not easily approved, the approach might suggest mixing in guarantees, insurance or technical assistance to mitigate permitting risks.

Right now, the approach is applied through in-person workshops with a broad cross-section of stakeholders. In 2025, WRI convened consultations in Colombia and Rwanda to pilot this methodology, focusing on on-grid solar in both cases. These experiences already showcase how these countries were able to assess their financing options by:

  • Identifying barriers and enabling solutions: Suggesting ways to address identified obstacles through policy adjustments or enhancements, unlocking projects, reinforcing regulatory certainty and attracting more private investment.
  • Supporting project developers: Identifying and comprehensively analyzing risks across the project lifecycle and evaluating mitigations measures that can enhance feasibility and certainty.
  • Opening avenues for financiers: Identifying potential financial instruments and opportunities for establishing public-private partnerships and initiating the design of credit guarantees for concessional loans, expanding leverage options in the sector.

Solutions for the Future

As countries and stakeholders including utilities, energy users, investors and project developers look to invest in clean energy, WRI’s approach can help decision-makers identify financing options.

As WRI supports countries, financial institutions public or private, businesses and other stakeholders on their journey to developing renewable energy solutions, this approach provides an opportunity for multiple actors to gather and decide together which courses of action to take.

WRI staff workshops and facilitates the emergence of effective dialogues in specific country contexts. For example, this approach can help diagnose clean energy opportunities not yet available on a broad scale in their country (e.g., solar or wind), or establish country platforms with a strong renewable energy component.

Efforts are also underway to translate this approach into an open, web-based application that could be used widely to facilitate a better understanding of how to finance clean energy in different contexts and adapted to specific technologies.

This update is part of a WRI project to identify tailored financing solutions to power the shift to renewable energy. Our approach guides policymakers and investors in assessing the maturity of a technology and the readiness of a country’s market as well as potential revenues and costs to pinpoint effective financing options and determine viability.  

Learn about how this approach has been used in Rwanda and Colombia.

WRI is actively fundraising to continue working on this approach. To get in touch, contact Valerie Laxton: [email protected].