Separate Accounting for Project Preparation and Project Execution
has concentrated on this problem. We have developed a commercial
model for RE deployment tailored to the specific needs and capacities
of developing countries.
innovative approach to RE project financing consists in separating
all projects into a non-commercial and a commercial part. By separating
all project preparation activities (from site identification to
business plans, from active involvement of all stakeholders to empowerment
of the future RE production site owners and managers) from the final
project execution as such (from technology purchase, transport,
and construction phase to operation and maintenance of the RE production
site), RforD is able to distill a purely commercial part
out of the whole project.
Project Bundling to Scale
Up Project Volumes
opens the sector of decentralised RE production to any institutional
In order to make economie of scale, RforD prepares and conducts
the highest possible number of single projects in a region at the
same time. This multiplication
approach allows to
up-front cost of RE equipment ba placing large orders
in logistics cost
the use of project preparing activities
results with national authorties due to stronger bargaining chips
(more projects = more development impact! = higher stakes)
financing institutions involved due to a higher overall financial
Bringing down average project cost reduces the financial burden
of the target population.
Initial investment cost will be amortized more quickly.This reduces
the financial risk of any investor.
Single projects are often "too cheap" to get institutional
investors involved. Being to small in scale, such projects find
no financing. Bundling single projects together increases the total
Thus, development banks can lend to socially, ecologically and economically
highly beneficial decentralised small projects by dealing with RforD
as intermediary who creates the required volume.
order to maximise project output while minimising investment risk
RforD adopts a new approach to project financing. Able to present
a commercial project part to institutional investors, RforD can
easily secure financing for this commercial part, out of the following
sources or a mix of them:
project preparation, traditional and newly emerging funding sources
carbon funds using the "Clean Development Mechanism" (CDM)
Facility (GEF) funds for RE projects
international organisations or foundations, such as the UN, the
Development Aid (ODA)
specific project development funds at preferential conditions, such
as for the development of a project pileline.
Revolving RE Fund
order to manage all available financing resources, RforD is setting
up a revolving RE project fund. This fund is to be managed by an
experienced developing bank that is RforD's partner. We still look
for the appropriate candidate to set up and mangage our revolving
The RE fund invests in a larger portfolio of diverse RE projects
in different countries, not in single RE projects. It is RforD's
job to identify and prepare this project portfolio for investment,
paying attention to economic, ecologicall and social aspects.
The RforD RE fund represents an attractive investment because of
financial long-term sustainablility of RforD RE projects and excellent
direct effects on poverty alleviation and climate change mitigation.
matching existing needs with existing potential in a commercial
adapted to local capability and capacity, provided by local service
tapping of all kinds of resources, as well as separate accounting
for commercial and non-commercial project components throughout
the whole project life-cycle
empowerment and involvement
of target communities in their RE project
integrate a rural RE business sector in one’s portfolio?
investment: excellent fund for portfolio diversification
a clear support for greenhouse gas emissions reduction
clear project selection criteria assure a favourable equity impact
enables RforD to create means of income generation for the rural
strategies: professional fund management, co-financing, guarantees