Unfortunately, traditional grant-based funding, which humanitarian organisations rely on, is not sufficient to deliver the energy needs of the displaced or to support the required institutional energy transition. Blended finance may be part of the solution to bridging the funding gap and help drive self-sustaining solutions in displacement settings.
This report provides an overview of blended finance mechanisms and their role in delivering sustainable energy solutions as part of humanitarian response. The report highlights key lessons learned from the use of different blended finance mechanisms in displacement settings and makes recommendations for their continued development.
Attention is brought to the potential benefits of employing finance mechanisms such as direct funding, technical assistance, risk transfer mechanisms, and market initiatives. Reflections are drawn from existing projects across the globe, including energy initiatives in Sudan, Rwanda, Jordan, and Kenya.
The report’s associated Toolkit provides high-level guidance on developing blended finance solutions in humanitarian and displacement settings, and identifies relevant stakeholders and their input to developing such solutions. It contains a summary matrix that identifies the most favourable blended finance mechanisms for a particular clean energy project and an overview of the three most promising financial mechanisms, as evaluated by the NORCAP Blended Finance Working Group.
The toolkit is aimed at supporting energy specialists in developing market-based clean energy solutions in contexts that require blended finance solutions to support commercially sustainable interventions.