Research Project Reports

Financing Renewable Energy Development in East Asia Summit Countries
A Primer of Effective Policy Instruments

By Shigeru Kimura, Youngho Chang, and Yanfei Li

ERIA Research Project Report 2014-27

Posted: April 2016

Abstract

This research aims to identify and update the most effective policies in the Asian context, especially for member states of the Association of Southeast Asian Nations (ASEAN), China, and India. Specifically, it addresses what policies could effectively mitigate the most prominent risks related to renewable energy investments and, therefore, facilitate the application of the most promising financial mechanism in the region.

The studies of this project highlight policies that address the following issues regarding more effective promotion of renewable energy investment in the region: (i) to develop viable and innovative business models and financial mechanisms/structures, especially for distributed generation from renewable sources; (ii) to facilitate market creation through the implementation of market-based mechanisms; (iii) to provide stability of policies and the need for renewable energy legislation; (iv) to enhance the availability of high-quality and high-accuracy renewable energy resource data and other technical assistance to reduce the uncertainty of renewable energy production; (v) to rationalise electricity market design that internalises not only the positive externality of renewable energy but also its negative externality (especially the impact on the grid capacity and grid balancing); and (vi) to improve the availability of financial resources in the region through market creation and enhancement of innovative financial instruments, such as Green Bond, which may be familiar and attractive to Asian investors. The other innovative instrument to reduce the cost of debt financing is public foreign exchange hedging facility for renewable energy financing.

Full Report

RPR-FY2014-27

Contents

Cover

Acknowledgements

List of Project Members

Contents

List of Abbreviations

Executive Summary

Chapter 1. Financing Renewable Energy in the Developing Countries of the East Asia Summit Region

Chapter 2. Renewable Energy Policies in Promoting Financing and Investment amongst East Asia Summit Countries: Quantitative Assessment and Policy Implications

Chapter 3. Assessment of Instruments in Facilitating Investment in Renewable Energy Off-grid Projects: Global Experience and Implications for ASEAN Countries

Chapter 4. Business Models and Financing Structures for a Rapid Scale-up of Rooftop Solar Power Systems in Thailand

Chapter 5. Analysis of Distributed Solar Photovoltaic Power Policy in China

Chapter 6. Innovative Business Models and Financing Mechanisms for Distributed Solar Photovoltaic Deployment in China

Chapter 7. Exuberance in China's Renewable Energy Investment: Rationality, Capital Structure, and Implications with Firm-level Evidence

Chapter 8. The Impacts and Interaction of Upstream and Downstream Policies for the Solar Photovoltaic Industries of China

Chapter 9. Retail Electricity Tariff and Mechanism Design to Incentivise Distributed Generation

Chapter 10. Financing Solar Photovoltaic Projects: Energy Production Risk Reduction and Debt Capacity Improvement

Chapter 11. Bond Financing for Renewable Energy in Asia

Chapter 12. Utilising Green Bonds for Financing Renewable Energy Projects in Developing Asian Countries

Chapter 13. Renewable Energy Policies and Solar Home System in Cambodia

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