A new report from the International Renewable Energy Agency (IRENA) offers possible ways through which investments in renewables can be increased in the coming years.
The report is directed towards policymakers, financial institutions and project developers with several options to scale up investment in renewable energy.
IRENA mentions that in order to meet global climate and sustainable development targets, investment in renewable energy must be doubled by 2020 and tripled by 2030. Its report says that this is not an impossible task and it is entire possible to make these investments.
Policymakers and public finance institutions are urged to employ a range of approaches that can offer support to private finance which will make up majority of new investments in renewables.
The report analyses several financial instruments and structures and serves as a one-stop guide to scale up renewable energy investment worldwide.
It discusses several case studies and survey results and offer insights on opportunities, challenges and best-practices found in different markets.
Five main action areas have been identified in the report where policymakers and public finance institutions offer solutions for risks and barriers that renewables energy projects are facing.
Tools and grants that support project preparation are vital in the advancement of renewable energy projects from the stage of initiation to full investment maturity.
Governments and public finance institutions should empower local financial institutions and design lending facilities to improve access to capital and build local lending capacity.
Public finance institutions should also focus on utilising private investment opportunities by increasing the use of guarantees and developing new, targeted risk mitigation instruments which can reduce risks such as power-off taker, currency and liquidity risks.
Capital market players can shift towards standardised project documentation and processes to allow for aggregation of projects and governments and develop guidelines for issuing green bonds to mobilise more capital market investment.
Dedicated financial institutions can also be developed to issue risk mitigation instruments and support design and implementing structured finance mechanisms for renewables.
IRENA director-general Adnan Amin said: "Renewables lie at the heart of the global energy transformation, which offers an economically attractive answer to energy security, energy access and climate change.
"Markets worldwide can respond to the economic realities of renewables today and attract large-scale investors into the renewables sector."
Amin added: "This new report demonstrates that scaling up renewable energy investment to the levels required is possible through policy and financial tools at hand today.
"Governments and other stakeholders now have the tools to take the actions needed to meeting global climate and sustainable development goals."