聯(lián)合國(guó)西亞經(jīng)濟(jì)社會(huì)委員會(huì)-降低阿拉伯地區(qū)農(nóng)村地區(qū)小規(guī)?？稍偕茉吹娘L(fēng)險(xiǎn) De-risking small-scale renewable energy in rural areas of the Arab region

De-riskingsmall-scalerenewableenergyinruralareasoftheArabregion

UNITEDNATIONS

ESCWA

sharedprosperityDignifedLife·hvaaaa

VISION

ESCWA,aninnovativecatalystforastable,justandflourishingArabregion

MISSION

Committedtothe2030Agenda,ESCWA’spassionateteamproducesinnovative

knowledge,fostersregionalconsensusanddeliverstransformationalpolicyadvice.Together,weworkforasustainablefutureforall.

E/ESCWA/CL1.CCS/2024/TP.1

EconomicandSocialCommissionforWesternAsia

De-riskingsmall-scalerenewableenergyinruralareasoftheArabregion

UNITEDNATIONS

Beirut

?2024UnitedNations

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Coverphoto:?Frank/

2302093E

Acknowledgements

Authorship

ThisreportwasdevelopedbytheEnergyTeamintheClimateChangeandNaturalResourceSustainabilityClusteroftheUnitedNations

EconomicandSocialCommissionforWestern

Asia(ESCWA).Theleadauthorofthereportis

MustafaAnsari,EconomicAffairsOfficer,undertheoverallsupervisionofRadiaSedaoui,ChiefoftheEnergySection.

Reviewandconsultation.

Theexpertreviewprocesswascoordinatedby

ESCWAandincludedanexpertgroupmeetingonde-riskingsmall-scalerenewableenergyinruralareasthroughmicrofinanceandmatchmaking,

organizedbyESCWAinBeirutinDecember2022.Substantiveinputswereprovidedbytheexpert

groupmeetingparticipants:KevinJohnstone,

SeniorResearcherforEnergyandLivelihoods,

theInternationalInstituteforEnvironmentand

Development;QuentinPeries-Joly,Business

Development,ENGIE;SandraWinarsa,Program

DevelopmentCoordinator,HIVOS;andMongiBida,SustainableEnergySystemsConsultant,Tunisia.

Technicalreviewwasalsoprovidedby

SyhamBentouati,ManagingDirector,NAFASInternational;KapilNarula,SeniorAnalyst,

ClimateChampionsTeam,UnitedNationsFrameworkConventiononClimateChange;

SamerZawaydeh,IndustrialFellow,AlHussein

TechnicalUniversity;NedalAbuRub,Economic

Manager,PalestineElectricCompany;andFaranRana,AssociateProgrammeOfficer–Renewable

EnergyFinanceandPolicy,InternationalRenewableEnergyAgency.

3

Keymessages

?Kristof/

Keymessages

Fundingsourcesshould

bebroadenedtoinclude

multilateralandinternationalfinancialinstitutions,

nationaldevelopment

banks,foundations,impactfunds,privatefunding

andcommunity-based

financing.Climatefinanceshouldbechannelled

throughGovernmentsandinternationalorganizationstoimprovethecapabilitiesoflocalplayers.

Intermediariessuchasmicrofinance

institutionsplay

acrucialroleby

providingflexible

loans,technical

assistanceand

capacity-building,

aswellasmitigatinginvestmentrisks

tosupportthe

widespreadadoptionofrenewableenergytechnologies.

Thelackofrobust

policyframeworksandperceivedriskshindertheadoptionofsmall-scale

renewableenergy

inruralareas.De-

riskingstrategies,

customizedfinancingsolutionsand

capacity-buildingareessentialtoovercomethesebarriers.

Establishingstrategicpartnershipsbetweengovernmentinstitutions,

internationaldonors,NGOsandotherstakeholdersisvitalforachieving

sustainableruralenergysolutions.

Effectivecollaborationandcapacity-

buildinginitiativesarecrucialforscalinguprenewableenergyinruralareas.

Tailoredfinancialinstruments

whichtakeintoaccountsocial

normsandgenderdimensions,

alongwithdiversebusiness

modelssuchaspay-as-you-goandleasing,arenecessarytoaddressaffordabilityandaccessibility

issuesintheArabregion.

5

Contents

Acknowledgements 3

Keymessages 5

Abbreviationsandacronyms 8

Introduction 9

1.Small-scalerenewableenergy 11

2.Challengestode-riskinginvestmentsintheArabregion 15

3.De-riskinginvestments 21

A.Sourcesoffinance 21

B.Intermediaries 25

C.FinancialInstruments 36

D.Non-financialinstruments 42

E.Businessmodels 44

F.Novelandemergingbusinessmodels 46

4.Policyinstrumentsandrecommendations 55

Endnotes 58

Bibliography 60

6

Listoffigures

Figure1.TotalfinalenergyconsumptionoftheArabcountries–breakdownbysource,2020 11

Figure2.Annualcommitmentstooff-gridrenewableenergybytypeofinvestor,2015–2021 22

Figure3.Processofapplyingforloansunderthemicrocreditfacility 30

Figure4.Kiva’srelendingmodel 34

Figure5.MechanismoftheAfricanEnergyGuaranteeFacility 41

Figure6.Flowoffundsoverview 48

Figure7.Barriers,enablersandtheircontributiontothelendingrateriskpremium 50

Listofboxes

Box1.REGEND 12

Box2.Specificbarrierstofinanceforwomen 13

Box3.UnlockingphilanthropicpotentialwiththeawqafsystemintheArabregion 24

Box4.ClimatefinanceneedsintheArabregion 27

Box5.Usingoutputsfromgrant-basedprogrammestoaddressperceivedrisksandadvocate

forinnovativefinancingintheSudan 28

Box6.MobilizingcommunitysavingsgroupsforbusinessfinanceinAfrica 32

Box7.TheuseofgrantstopromoterenewableenergyandsupporthouseholdsectorinJordan 36

Box8.SubsidyprogrammesinJordan 37

Box9.TunisianSolarProgramme 39

Box10.UNDPDe-riskingRenewableEnergyInvestmentframework 43

Box11.EmpoweringruralwomeninSenegalthroughequipmentleasing 45

Box12.Combiningmicrogridsandthe“anchorcustomer”approachthroughfinancialbundling 47

Box13.Carboncreditsinfragileandconflictaffectedareas 51

Box14.Genderinenvironmental,socialandgovernance 52

Box15.MeshgridsforruralpowerresilienceinHaiti 53

7

Abbreviationsandacronyms

ABC

D-REC

DESCOs

DFI

IFI

GEF

MFI

MIGA

NGO

PAYG

PREC

PV

REC

REGEND

SDGs

SMEs

UNDP

UNHCR

USAID

VSLAs

Anchor-based/businessconsumer

DistributedrenewableenergycertificateDistributedenergyservicecompaniesDevelopmentfinanceinstitution

InternationalfinancialinstitutionGlobalEnvironmentFacility

Microfinanceinstitution

MultilateralInvestmentGuaranteeAgency

Non-governmentalorganizationPay-as-you-go

PeaceRenewableEnergyCredit

Photovoltaic

Renewableenergycertificate

RegionalInitiativeforPromotingSmall-ScaleRenewableEnergyApplicationsinruralareasoftheArabRegion

SustainableDevelopmentGoals

Smallandmedium-sizedenterprises

UnitedNationsDevelopmentProgramme

OfficeoftheUnitedNationsHighCommissionerforRefugeesUnitedStatesAgencyforInternationalDevelopment

Villagesavingsandloansassociations

8

Introduction

Inaneradefinedbytheimperativesof

sustainabledevelopmentaswellastheneedtomitigateclimatechange,small-scalerenewableenergyisapromisingandnecessarytoolfor

ruralcommunitiesacrosstheArabregion.The

potentialofsmall-scalerenewableenergyto

bringabouttransformativechangeisundeniable.Itofferstheprospectofimprovedlivelihoods,

expandedeconomicopportunitiesandenhancedresilienceinthefaceofclimaticuncertainties.Thispaperaddressesthesignificanceofde-

riskingsmall-scalerenewableenergyinitiatives,layingthefoundationforadoptingthemand

scalingthemuprapidlyandbringingaboutvariousbenefits.

TheArabregion’svast,largelyuntappedrenewableenergypotentialpresentsan

opportunitytoliftmillionsoutofenergypoverty

bycreatingemploymentandfosteringlocal

economicgrowth.Thepotentialbenefitsgobeyondthemereprovisionofenergy.However,many

developingnations,includingthosewithintheArabregion,shareanarrativeofuntappedpotential,

fragmentedmarketsandsubstantialbarriers.Foremostamongtheseobstaclesisthehigh

levelofriskassociatedwithrenewableenergyinitiatives,discouragingpotentialdevelopersandinvestorsfromventuringintoalandscapecharacterizedbyuncertainty.

Economiesofscalehavelongbeenapriority

fordevelopersseekingtooptimizecosts,and

forinvestorsseekingreturns.Buttheunique

dynamicsofruralareasmakeadifferent

approachnecessary.Ruralhouseholdsareoftenlessprosperous;thismakesitnecessaryto

identifyinnovativebusinessmodelscapableofaligningdevelopers’interestswiththepressingneedsofruralcommunities,achievingalastingimpact.Intheabsenceofappropriatefinancialandoperationalmodels,theimmensepotentialofintegratedsmall-scalerenewableenergy

solutionsremainslargelyuntapped,leavingpotentialbenefitsforbothdevelopersandcommunitiesunrealized.

Againstthebackdropofinternationalcommitments

suchasthe2030AgendaforSustainable

DevelopmentandtheParisAgreement,theneedtomobilizefinancialresourcestoaccelerate

sustainabledevelopmenthasrapidlygained

momentum.Toharnessthefullpotentialofsmall-scalerenewableenergyinruralareas,itwillbe

crucialtoachieveastrategicalignmentbetweenfinanciers,developersandendusers.Thispaperattemptstohighlightthekeyinstrumentsand

businessmodelsthatcaneffectivelyde-risksmall-scalerenewableenergyinitiativesinruralareasintheArabregion.Bysheddinglightonadiverserangeofpolicyandfinancialtools,itcanserve

asguideforpolicymakersandstakeholdersforovercomingexistingchallenges.

Thepapercoversaspectsincludingtheroleof

intermediariessuchasmicrofinanceinstitutions,andconsidersdiversesourcesoffinance,fromgovernmentfundingmultilateralinstitutions,

providinginsightsintothecomplexlandscape

ofclimatefinance.Italsoexaminesfinancial

instruments,riskmitigationstrategies,technicalassistanceprogrammesandanarrayofbusinessmodels.Theobjectiveistopresentathorough

analysis,coupledwithpolicyinstrumentsandrecommendations,withaviewtocultivatingaconduciveenvironmentforthesustainabledevelopmentofsmall-scalerenewableenergyprojectsinruralArabcommunities.

?ElianeHaykal/

9

1.Small-scale

renewableenergy

?Naeblys/

?1.Small-scale

renewableenergy

IntheArabregion,theuptakeofrenewable

energyhasbeenmixed.Mostcountriesinthe

regionarenetimportersofenergy.Despitethis,

thecontributionofrenewableenergytothe

region’stotalfinalenergyconsumptionin2020

remainedmodest,at5.1percent

.1

Thedivideis

mostpronouncedinruralareas,whichfacean

energydeficitofover80percent,evenhigher

intheregion’sleastdevelopedcountries.The

adoptionofrenewableenergyinruralregionshasbeenslow.Thishasbeenattributedtofactorssuchasinadequateinfrastructureleadingtohigher

costs,insufficientfinancialresources,heavy

relianceonconventionalenergysources–whichaccountedfor76percentoftotalrenewable

energyconsumptionintheregionin2020–andanabsenceofrobustpolicyframeworksprioritizingrenewableenergyinthesesettings

.2

Asanexample,thepotentialforsolarenergyintheArabregionhasalwaysbeenhigh.Butuptakeonly

begantoincreasewhenpolicieswereintroducedtoremovemarketbarriersandencourage

privatesectorinvestment.ThesepoliciesledtoapositiveinvestmentclimateforlargeState-runutilityproviders,withattractivefinancingrates,

particularlyintheGulfCooperationCouncil

countries,whererecord-breakingtendersplacedtheregionamongstthelowest-costproducersofsolarphotovoltaic(PV)energy.

3

Effortstoincreasetheshareofrenewableenergy

intheenergymixareongoingatgloballevel.

Toachievethis,countrieshavepredominantly

focusedonlargeutility-scalerenewableenergyattheexpenseofruralelectrification.Nevertheless,

renewableruralelectrification,evenonasmall

scale,canalsoplayarole.Itcanalsocontributetoaddressingenergyaccessproblemsandprovide

asustainablepathwayforeconomicgrowthin

certainArabcountries.Thisisespeciallyrelevant

incountriesaffectedbyacutechallengessuchas

conflict.InYemen,forexample,solarinfrastructurehasdemonstratedthepotentialofsmall-scale

renewableenergytoprovideessentialenergy

servicesincrisisareas.

4

Beyondimmediaterelief,

thesesolutionscanalsofostereconomicgrowth.Bycircumventingtheproblemssometimesassociatedwithtraditionalenergyinfrastructureconstraints,

theyserveascatalystsforsustainableeconomicdevelopment,empoweringlocalcommunitiesandsupportingschoolsandhealthcarefacilities.

Figure1.TotalfinalenergyconsumptionoftheArabcountries–breakdownbysource,2020

Wind

0.2%

SolarSolid

0.4%bf

Hydro0.6%

Non-renewable94.9%

Renewable5.1%

Source:ESCWA,2023a.

11

Box1.REGEND

TheRegionalInitiativeforPromotingSmall-ScaleRenewableEnergyApplicationsinruralareasoftheArabRegion–REGEND–demonstratesthepotentialbenefitsofresolvingenergydisparitiesinruralArabareas.Bychampioningsmall-scalerenewableenergy,REGENDreducesreliance

on“handouts”,insteadpromotingself-sustaininginitiativesbasedonexpertiseandencouraginginvestmentsinrenewableenergy.REGENDiscurrentlyfundedbytheSwedishInternational

DevelopmentCooperationAgencyandtheIslamicDevelopmentBank.

ThemainobjectiveofREGENDistoincreasetheuptakeofrenewableenergy.However,the

challengeliesinde-riskingtheseeffortsforwideradoption.WhetheritisfinancedthroughStateorprivatefunds,small-scalerenewableenergyrequiresstrategiestomitigaterisks.Thebenefitsofincreasedenergyaccessforbasicneedsandincomegenerationextendtoothersectorsintheruraleconomy,suchasagriculture,forminga“virtuouscircle”.

Theenergyandagriculturevirtuouscircle

community

Newenergyservices

introducedintocommunity

Increasedenergy

access

Increasedincome

Increasedagriculturalproduction

Source:USAID,2020.

Small-scalerenewableenergyhasbroughtamultitudeofbenefitstoruralcommunities.These

includeimprovedwaterandfoodsecurity,improvedhealthandeducationandlowerlevelsof

pollution.Theyhavehadaparticularlypowerfulimpactonwomenandtheirentirecommunity.InruralareasofJordan,LebanonandTunisia,REGENDhasdemonstratedthatempoweringwomentoownandoperatesmall-scalerenewableenergytechnologiesandproductiveusesofenergycanfreeuptimeotherwisespentonhousekeepingorfuelcollection,aaswellasreducingtheoperatingcostsofbusinessestypicallyrunbywomen.b

aESCWA,2020a.bESCWA,2020b.

12

Gender-inclusiverenewableenergysolutionsinruralareas

Inruralareas,womenarefrequentlyinvolvedinagricultureandotherincome-generatingactivity.Women’sparticipationintheenergysector,

however,remainsconsistentlylow.Thisistruebothatregionalandgloballevel.

Inmanydevelopingcountries,financial

institutionslackfamiliaritywiththeoff-gridenergysector,viewingsmallrenewable

energytechnologiesasunattractivehigh-

risklow-volumeendeavours.Consequently,

theyimposehighinterestratesandstringent

collateralrequirements.Thisposesabarrierto

entrepreneurs,andwomeninparticular.Financialinstitutionsalsofrequentlyfailtorecognizethe

distinctneedsofwomen-ledbusinesses,leadingtoalackoftailoredfinancialinstrumentsand

interventions.Acomprehensivestudyinvolving

over30CEOsandseniorbankersfromfinancialinstitutionsrevealedaprevailingperceptionthatmaleandfemaleclientswereessentiallyalike,discountingtheexistenceofa“businesscase”forcateringtothefemalemarket.

5

Evenwhenwomenmanagetosecurefinancing,

additionalhurdlespersist.Forexample,money

frommicro-lendingissometimesdivertedtowardshouseholdexpensesorunintendedpurposes,

leavingwomenobligedtorepayloanseventhoughtheywereunabletousethemtoinvestintheir

businesses.Itisessentialtoraiseunderstandingoftherolegenderplaysinsmall-scalerenewableenergy.Tailoredinstrumentsneedtobemade

availabletoaddressthesechallengessothattheopportunitiesbroughtbywomen’sparticipationintherenewableenergysectorcanbeseized.

Box2.Specificbarrierstofinanceforwomen

Peopleinremoteandruralcommunitiesfacesignificantchallengesingainingaccesstofinance.aWomenfaceparticulardifficulties,inparticularbecauseoflegalandregulatorybarriers.bInsomeregions,archaicrequirementsareformidableobstacles.Insomeareas,forexample,amalefamilymembermustprovidepermissionforawomantoopenabankaccount.Suchrequirementshaveaclearlydetrimentaleffectonwomen’sfinancialinclusion.

Documentationisalsoabarrier,particularlyforwomen,whooftendonothavetheidentificationdocumentstheyneed.InBangladesh,abirthcertificateisneededtoopenabankaccount.Butitiscommonforwomen,especiallywomenfrompoorerbackgrounds,nottoberegisteredatbirth.cThesewomenthereforehavegreatdifficultyingainingaccesstofinancialservices.

Therearealsobarriersassociatedwiththeownershipofproductiveresources.Insomecountries,propertycannotbeheldinawoman’sname.Thispreventswomenfromusinglandandproperty

ascollateralforloans.Culturaldynamicsfurthercompoundthesechallenges.Womensometimesprefertohavefemalepointsofcontactinfinancialservices.Whenthisoptionisunavailable,asitoftenis,womencanbehesitanttoengagewithfinancialinstitutions.

Addressingthesemultifacetedchallengesiscrucialtounleashingtheuntappedpotentialofwomeninremoteruralareas,ensuringimprovedlivelihoodsandenhancingparticipationinsustainable

economicgrowth.

aDESA,2018.

bWorldBank,2023.

cCherieBlairFoundation,2023.

13

2.Challenges

tode-risking

?Dynamoland/

investmentsintheArabregion

?2.Challengestode-riskinginvestmentsintheArabregion

TheArabregionisadiverseregion,adiversity

whichismirroredbythechallengesandrisks

theregionfaces.Somechallengesaremore

pronouncedthaninotherdevelopingcountries,andmustthereforebetakenintospecialconsideration.

Acrosstheglobe,renewableenergyuptakeinruralareasofdevelopingcountrieshasbeenlimited.Some

ofthereasonsforthislimiteduptakeareuniversal:poverty,forexample,hasconsistentlyhampered

theuptakeofrenewableenergytechnologies.Otherreasonsaremorelocalized.Culturaldifferencesandconflict,forexample,varyfromplacetoplace.Thefocusherewillbeonchallengesparticulartothe

Arabregion.Risksarisingfromglobaldisruptionstothemarketwillreceivelessattention.

、Barriersandrisksfacingvariousstakeholdersalongthevaluechain

Implications

?Financialconstraintshindertheadoptionofsmall-scalerenewableenergy

?Renewableenergy

technologiesmustcompetewithotheressentialexpenses

?Long-termsavings

potentialfromrenewableenergytechnologiesisovershadowed

?Limitedaccesstosuitablefinancingoptions

?Cumbersomedisbursementprocedureshinderthe

adoptionofavailablefinancingmechanisms

Thelargestelectricity

?Affordabilitychallengesanddependenceonsubsidizedfuels

?Consumersexposedtopricevolatilityofliquidfuels

?Consumersexposedtooftenunreliablegridelectricity

?RuralArab

communities

facefuelpoverty

?Highupfrontcostsimpactpayments

?Limitedsavings

?Unpredictableincome

?Lackof

microfinancetools

?Complex

procedures

?Decisionsaffectedbyaffordability

?Fuelsubsidies

?Subsidizedgridelectricity

subsidizersin2022wereEgypt($31billion),SaudiArabia($25billion),

Algeria($14billion),the

UnitedArabEmirates($12billion)andKuwait($11

billion).Thesefiguresincludesubsidiesonfossilfuelsforpowergeneration.a

Stakeholdergroup

Demandside/endusers

Barrierorrisk

Povertyandaffordability

Commontoleast

developedcountriesandruralareasoflow-andmiddle-incomecountriesacrosstheregion.

Willingnesstopay

Regionalcontext

Suitablefinance

Features

15

、Barriersandrisksfacingvariousstakeholdersalongthevaluechain

Stakeholdergroup

Barrierorrisk

Socialnorms

Regionalcontext

Features

Implications

?Limitedadoptioninareas

withculturalresistance,

especiallyincommunities

withtraditionalgendernorms

?Lackofawarenesshamperstheacceptanceofrenewableenergytechnologies

?Hindersaccesstosuitablefinance,especiallyinruralhouseholdsandsmall

businesses

?Limitedcapacitytomake

informeddecisions

regardingrenewableenergyinvestments

?Womenfaceadditional

challengesfrominabilitytoputupcollateralandobtainloans

?Highercostsduetolimitedaccesstotrainingand

technology,andconstrainedmarketopportunities

?Infrastructurechallenges

fromgridconnectivityto

suitabilityofdwelling(e.g.for

rooftopsolarpanels)

?Resistanceduetolimitedawareness

stemmingfromlackofeducation

?Perceived

complexityoftechnology

?Gender

sensitivities

?Lackawarenessofavailable

Knowledgeand

awareness

financingoptions

?Limitedcapacityfornavigatingfinancial

systems

Isolation

?Geographicalremoteness

increasesfinancialexpenses

?Higherfinancialexpensesassociatedwithsubparenergysolutions

?Fewcompaniesforinstallation

?Limitedservicesand

financingoptionsforsmall-scalerenewableenergy

technology

?Lowergrowthandprofitabilityforsmallbusinesses

?Hamperstheavailabilityofresources,expertiseandnecessaryfunding

andmaintenance

?Fewcompaniesproviding

Absenceofprivatesector

Supplyside/producers

suitablefinance

?Limitationsonupstreamresearchanddevelopment

?Limitationsondistribution,marketingandsales

16

、Barriersandrisksfacingvariousstakeholdersalongthevaluechain

Stakeholder

Implications

Regionalcontext

Features

group

Barrierorrisk

?Smalland

medium-sizedenterprises

(SMEs)face

high-interest

loansand

collateralissues

?Shortageof

domesticinvestorcapitalandlackoffamiliarity

?Producerslackknowledge

inproject

development

?Qualityandavailabilityconcerns

Dedicatedfinancingandcapital

Internalcapacity-building

Hardwareand

operationalrisks

?Lowergrowthandprofitabilityforsmallbusinesses,duetorelianceonshort-termhighinterestrateloans,especiallythoseinlessunderstoodor

riskysectors

?Limitedbargainingpower

resultsinchallengesaccessingsuitablefinance,including

shortrepaymentperiodsandrepaymentstructuresthatdonotalignwithrevenues

?Limitedabilitytounderstandend-userneedsandsecurefundsforprojectdevelopmentandimplementation

?Skillsgapinlocalcapacityhamperseffectiveprojectdevelopment

?Risktoreputationanduser

reluctanceduetopoor-qualityequipment

?Challengesinsourcing,

procuring,installing,

maintainingandrepairing

renewableenergyequipment

experiencedsignificant

currencydepreciations,resultinginstarkdisparitiesbetweenofficialand

blackmarketexchange

rates.Thecurrencies

ofEgyptandTunisia

havealsodepreciated

byapproximately50

percentand20percentrespectivelysincethestartoftheCOVID-19pandemic.

CountriessuchasLebanon,theSyrianArabRepublicandtheSudanhave

?Lenderscautiousabout

extendingloansinlocal

?Depreciationaffectsloanrepaymentsinlocalcurrency

?Poor

infrastructurehindersremotedistribution

Currencyrisks

currency,impactingprojectfinancingandaffordabilityforendusers

?Globalcurrencyfluctuationsinfluenceimportedequipmentcosts

Last-miledistribution

?Increasedcostsandlogisticalcomplexitiesinsupplyingtoruralareas,limitingaccesstosmall-scalerenewableenergysolutions

?Reluctancetoinvestin

expandingoperationsduetoassociatedcosts

17

、Barriersandrisksfacingvariousstakeholdersalongthevaluechain

Stakeholder

Implications

Regionalcontext

Features

?Arabregionhistorically

markedbylowenergyprices

?Limitedsubsidiesforrenewable

energy

discourageadoption

?Unpredictableregulationsandtaxesgoverningrenewable

energyand

otherinterlinkedsectors

?Inadequate

existinglegalandregulatoryframeworks

?Limited

expertisein

formulatingandimplementingpolicies

?Stringentlabourlawsb

?Absentcohesivecrosssector

group

Barrierorrisk

?Limitedincentivesfor

adoptingsmall-scale

renewableenergyinrural

Price

mechanisms

areas,especiallywhenfossilfuelsubsidiespersist

?Short-termcostcomparisonshindertheuptakeof

renewableenergysolutions

Uncertain

policyandregulatoryframeworks

?Investorconfidenceunderminedbypolicyinconsistencyand

unpredictability

?Legalandregulatory

frameworksmaynot

adequatelyaddresssmall-scalerenewableenergyneeds.

Ecosystemsandenablingactors

Forexample,in2015,theGovernmentofMoroccointroducednet-meteringschemesforsolarPVandonshorewindplants,butthisonlyappliedtopowerplantsconnectedtothehigh-voltagegrid.c

?Delays,inefficiencies

and