Financing Access to Cooling Solutions

Background Document

This knowledge brief from Sustainable Energy for All (SEforALL), in support of the Kigali Cooling Efficiency Program (K-CEP), details current challenges for access to sustainable cooling finance, but also opportunities and recommendations for overcoming them.

Financing for access to cooling solutions is a significant challenge. The diversity of cooling access needs—from those of large wealthy companies to those of poor rural populations; from large buildings to urban slums to rural huts; from human comfort to cold chains for food and vaccines— requires a range of financial products, instruments, and approaches to deliver specific solutions.

Mapping finance needs and market gaps can enable the identification and improve the ability to overcome the barriers for financial flow necessary to increase access to cooling. Some of these financing barriers can be surmounted with modest risk mitigants to attract private capital while others will require substantial subsidies and still others can only be addressed fully by grants.

Similarly, potential sources of funding will vary according to the likelihood of commercial returns, the local investment climate, the scale of investment and other factors. In some situations, commercial financing will be available. However, for projects requiring challenging or innovative solutions, such as for those that can meet the needs of poor rural populations, some commercial strategies such as bulk procurement to lower costs may be feasible, but in many cases public or grant funding may still be required.