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Development of an RBF Sectoral Mechanism for Energy+

The task: Energy+ is working to implement sector-wide programs within renewable energy and energy efficiency in selected developing countries, based on a Payment-By-Results approach.

The project: Differ was assigned to devise a concrete sectoral mechanism for implementation of Energy+ that can serve an efficient delivery mechanism for Sustainable Energy for All. Key aspects of the mechanism are neutrality in terms of technology, ability to stimulate commercial investments and suitability in terms of maximizing value per dollar donor funding. The proposed mechanism represents new approach in terms of result-based payments, by applying a “value-based approach” in addition to the standard incremental cost principle as basis for determining the payment levels. The mechanism is also aligned with the status and outlook of the UNFCCC process in order to enable climate finance, and is using existing CDM baseline and monitoring methodologies for measuring the impact in terms of CO2 emission reductions.

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