A new energy initiative called the Seed Capital Assistance Facility (SCAF) is currently in preparation for implementation in a number of GEF eligible recipient countriesThe facility is currently in the CEO endorsement stage of GEF project development.. The initiative involves the creation of a GEF and UN Foundation sponsored facility dedicated to helping early stage sustainable energy enterprises access start-up seed capital from mainstreamMainstream investors are defined as those financiers currently active in the energy sector in target regions, including development banks, local and regional commercial banks, national investment authorities, private investors, etc. energy investors. The Facility will be implemented through the Asian and African Development Banks, leveraging off of existing sustainable energy support programmes.

Through sharing enterprise development and transaction costs and providing a seed capital subsidy, the facility will help close the gap between what local sustainablei.e., renewable energy and energy efficiency. energy entrepreneurs are able to offer in terms of returns on investment, and the requirements of the investment community. By bridging this gap, the facility will:

1. Help provide entrepreneurs with the enterprise development services and early stage risk capital they need to develop sustainable energy businesses and projects;
   
   
2. Increase the scale and scope of these sorts of clean energy investment opportunities available to commercial financiers; and
   
   
3. Increase the volume of more commercially oriented capital available to the seed finance sector.

Rather than waiting on the side-lines for the sustainable energy sector to mature on its own, through this facility the finance community will be able to play a more direct role in accelerating renewable energy sector growth by channelling appropriate forms of investment capital to early stage project developments. By building experience in this area, it is hoped that early stage seed capital investing will increasingly be seen as a viable and cost effective strategy for building long term commercial energy investment portfolios.

Related Documents

Concept Brief (PDF - 108 KB)