What is Multilateral Development Bank

Renewable energy generation is a fundamental component of the transition to a low-carbon economy. The world needs to invest up to USD 600 million annually to meet the electricity demand in a sustainable way whereas the current investment level stands at USD 280 billion. Scaling-up the current level of investment requires a larger implication of the private sectors and a different role for the public sector. The challenge lays in the fact that different investors are motivated by a different risk and return profiles. The current chapter presents the trends in renewable energy financial flows and investment vehicles. It looks at the risks associated with the investment in renewable energy and the relevant risk mitigation instruments. Finally, it applies these concepts to the case of the Lake Turkana wind farm in Kenya, a project that faced many challenges and involved more than 15 investors.