Lessons From Output-Based Aid For Leveraging Finance For Clean Energy

This working paper has been prepared as backgound documentation to support a number of efforts being undertaken by the World Bank and other multi-lateral and bi-lateral donors in middle- and low-income countries linking support to clean energy with the need to make such supports more effective at leveraging the private sector and more focused on delivering sustainable services to low income consumers. 

These efforts are linked to the delivery of grants, credits, loans, and partial risk guarantee instruments. Specific efforts include current development of financing modalities for the Program for Scaling-up Renewable Energy in Low Income Counties (SREP) under the Climate Investment Funds and the joint program on results based financing and renewable energy that has been launched by the Energy Sector Management Assistance Program (ESMAP) and the Global Partnership on Output Based Aid (GPOBA). Also, application of the new World Bank instrument: Program-for-Results. This working paper uses a combination of project experience, recent literature, and discussions with developers to substantiate its arguments.