Risk mitigation and transfer for renewable energy investments: case studies in the Southern Africa Development Community

This report explores the role of risk mitigation and transfer (RMT) instruments for enabling renewable energy investments in Southern Africa Development Community (SADC) countries by examining empirical evidence from several projects in the region. Renewable energy has been one of the most successful sectors in using limited public funds to mobilize private finance and investment. However, progress has been uneven, with sub-Saharan Africa accounting for fewer than 1.5% of global renewable energy investments. One of the main barriers to greater investments is the perception of risk; when the probability of adverse events that damage the investment value of a prospective project is seen as high, investors either forgo the project or require higher returns, commensurate with the risk they perceive.