Private Financing Advisory Network Supports Clean Energy Development Across the Globe by Linking Viable Innovative Projects with Investors
Private Financing Advisory Network (PFAN) is one of few actors in the climate finance space addressing the barriers facing small and medium enterprises in developing countries and emerging economies. Primary challenges are shortage of bankable projects on the demand side and ability to assess risk and conservative lending culture on the supply side.
PFAN aims to bridge the gap between investors and entrepreneurs by matching private financing with viable low carbon, climate resilient projects in developing countries and emerging economies through a low risk, low overhead networking model based on fixed fee project development, transaction advisory services, and investor forums. These services are offered by PFAN at no cost to selected projects and entrepreneurs. The PFAN program’s approach includes:
- Originating projects and funding from the private sector
- Screening business plans for investment readiness and financing
- Selecting projects that are economically viable and environmentally and socially beneficial
- Providing technical assistance to support project development and facilitate finance
- Building the capacity of project developers and financiers
- Providing access to clean energy businesses and financial institutions through the PFAN network, and
- Providing feedback to policy makers on constraints encountered and opportunities with respect to the enabling environment.
In 2017, PFAN appraised 205 projects, 78 of which it provided coaching to and 33 of which it developed into bankable projects. ATEC Biodigesters International, a business selling biodigester systems for rural households and small-scale farmers in Cambodia was looking for investment to expand its operations. PFAN helped the company develop an investor-ready business plan. ATEC Biodigesters won a business plan competition at a 2017 PFAN global investment forum and secured funding. With ATEC Biodigesters’ new funding, rural Cambodians have more options to achieve energy certainty, improved health outcomes and increased income.
With more than US$ 1.2 billion of investment for 88 projects raised, PFAN has contributed to the establishment of more than 741 MW of clean generation capacity and annual mitigation of 2.6 million tonnes CO2e, and is now looking to target its next investment threshold of US$ 5 billion. The PFAN development pipeline currently includes 439 projects looking to raise US$ 9.7 billion of investment for a diverse range of clean energy initiatives in sectors including biogas, biomass, waste to energy, clean transport, wind, solar, small hydro, rural electrification and energy efficiency.
Currently PFAN spans many countries and regions around the world; its presence is biggest in Asia and Africa and it is expanding in Latin America and the Caribbean.
Under a new hosting arrangement with the United Nations Industrial Development Organization, in collaboration with the Renewable Energy and Energy Efficiency Partnership, PFAN’s impact will be likely be scaled by a factor of two to even five-fold by 2022-25.