Exclusive: World Bank arm plans US$250 million
backing for developing-world PV
Oct 14, 2013 - Ben Willis - pv-tech.org
|IFC is planning to back small-scale PV development in emerging markets with a US$250 million fund.
The International Finance Corporation (IFC), an
arm of the World Bank, is planning to launch a new
financing facility to pump-prime PV development in
emerging markets, PV Tech has learned.
The initiative will make US$250 million available
for a number of ‘PV service providers’ (PVSPs),
special vehicles for developing small-scale PV projects
in emerging markets.
The PVSPs will primarily target 2-3MW commercial
rooftop and small ground-mount projects in countries
where the economics of PV compare favourably with
grid or diesel generation, but where finance is difficult
The IFC’s solar energy industry specialist,
Guido Agostinelli, said that despite its huge potential
in developing countries, PV faced numerous deployment
challenges, the most significant of these being its
“In emerging countries you have to face the
fact that PV requires a large up-front investment – it
has low operating costs, but essentially you need
to pay up front. And often we’re dealing with
companies or people who are not able to set aside
the financing needed for solar. So the financing
conditions and the need for financing solutions are
often a barrier,” he said.
Agostinelli revealed that the PVSPs would combine
equity from the IFC’s US$250 million fund with
equity from selected sponsor bodies. The sponsor
bodies are likely to be companies with substantial
PV development knowhow, able also to offer engineering,
procurement and construction (EPC) expertise, and
“The facility will target service providers
that want to develop, deploy and manage portfolios
of PV installations in selected countries where we’re
going to start,” he said.
“You should think of these like project developers
who have the possibility to manage their assets and
the contracts related to the assets like they are
an IPP [independent power producer].”
The PVSPs will be responsible for identifying clients
for whom a rooftop or small ground-mounted PV system
for distributed generation makes sense, and for assessing
the financial strength of potential clients.
They will then install, own and operate these systems
and will collect payments over a pre-agreed period
from the clients.
“We see this approach as a win-win solution
for both the PVSP and the client – the PVSP
can scale up installations while for the underlying
client the repayment collected by the PVSP will not
change, unlike electricity bills which are more likely
to go up over time,” said Anastasia Gekis,
senior investment officer at the IFC
Although the IFC has so far yet to formally launch
the PVSP concept, the organisation is hoping to set
up the first PVSPs over the coming year.
Initially the body is aiming for 10 PVSPs, although
more will be considered if there is sufficient demand,
As a member of the World Bank Group, IFC focuses
exclusively on developing private sector activities
in developing countries.