Blended finance in fragile settings: P-RECs and the P-REC Aggregation Facility
This case study explores the experience of Energy Peace Partners in their establishment of the Peace Renewable Energy Credit (P-REC) and the P-REC Aggregation Facility, an innovative blended finance fund focused on impactful energy ventures in fragile settings.
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Asare Case study on Blended finance in fragile settings July 2024.pdf
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A key barrier to progressing distributed renewable energy (DRE) in fragile and conflict-affected situations (FCS) is a lack of financing, which primarily stems from the higher risks and uncertainty associated with FCS, including macroeconomic instability, security concerns, and transfer and convertibility risk, among other factors.
To facilitate investment into impactful DRE projects and expansion of clean energy access in fragile settings, innovative financing mechanisms and derisking tools and approaches need to be deployed to improve the bankability and sustainability of projects.
This case study focuses on blended finance, which uses grants and/or concessional funding (from, for example, bilateral donors and development finance institutions (DFIs)) to de-risk investments that have potential developmental or social impact, thereby improving the risk-return proposition for private investors and potentially crowding in additional private finance.