Wanted: blended finance for smaller, riskier projects

NEED to finance a large-scale wind or solar project? The bankers will line up at your door. If your project is a solar-powered mini-grid, however, even the purportedly accessible blended-finance solutions may not be available to you yet.

A report by members of US think tank Institute for Energy Economics and Financial Analysis (IEEFA) and India-based management consultancy auctusESG found that commercial lenders are still favouring utility-scale projects, while sidelining smaller projects.

The report’s authors said blended finance – meant to close a funding gap by offering credit to projects that would not qualify for conventional financing – needs demystifying to create a roadmap for interventions in those segments that struggle to secure conventional finance.