Scaling-Up Renewable Energy Program for Low Income Countries

Scaling-Up Renewable Energy Program for Low Income Countries

Summary

The Scaling-Up Renewable Energy Program in Low Income Countries (SREP) is a targeted programme under the Strategic Climate Fund (SCF), which is one of two trust funds comprising the Climate Investment Funds (CIF) framework.
Established in 2009, SREP supports low-income countries in demonstrating the economic, social, and environmental viability of low-carbon development pathways in the energy sector. The programme aims to expand energy access and stimulate economic growth through the deployment of renewable energy solutions, including solar, wind, small hydro, geothermal, and biomass.
SREP provides financing for enabling environments, capacity building, and investment in renewable energy infrastructure to help low-income developing countries transition to sustainable energy systems.

Basic Description

Name of the Fund Scaling-Up Renewable Energy Program in Low Income Countries (SREP)
Official Fund Website https://www.climateinvestmentfunds.org/topics/energy-access
Date Created
Date fund proposed: February 2008.
Date fund made operational: 14 December 2009.
Proposed Life of Fund The SREP was subject to the CIF’ ‘sunset clause,’ which was designed to phase out the CIF once a new financial architecture under the UNFCCC became effective. However, in June 2019, the CIF governing board decided to indefinitely postpone the implementation of this ‘sunset clause.’ As of now, the donors and recipients continue to operate under the existing framework.
Objectives The SREP is designed to demonstrate the economic, social and environmental viability of low carbon development pathways in the energy sector in low-income countries. It aims to achieve five main objectives:

  • Assist low income countries in fostering transformational change to low carbon pathways by exploiting renewable energy potential
  • Highlight economic, social and environmental co-benefits of renewable energy programmes
  • Help scale up private sector investments to achieve SREP objectives
  • Enable blended financing from multiple sources to enable scaling up of renewable energy programmes
  • Facilitate knowledge sharing and exchange of international experience and lessons.

SREP’s targets include:

  1. Generating over 3 million MWh per year of renewable energy
  2. Improving access to energy for over 140,000 businesses and 17.3 million people
  3. Reducing 2.5 million tons of GHG per year.
Financial inputs and fund size As of November 2024, SREP’s financial inputs amount to USD 750 million, including USD 86 million in funding from the private sector.
The contributor countries are: Australia, Denmark, the Republic of Korea, Netherlands, Norway, Spain, Sweden, Switzerland, Japan, United Kingdom and United States.
Contributions to the CIF, including the SREP, can be classified as Official Development Assistance (ODA) by contributing countries, provided they meet standard OECD-DAC criteria. These include:
Activities Supported SREP provides financing for renewable energy use and generation, specifically for proven “new” renewable energy technologies. For the purposes of SREP, renewable energy technologies include solar, wind, waste to energy, cookstoves, geothermal, as well as hydropower with capacities normally not exceeding 10MW per facility. Most of SREP projects provide energy solutions that include multiple renewable energy technologies (Mixed RE).
SREP also supports complementary technical assistance as this is considered essential for transformative and enduring change and country engagement and ownership. Technical assistance includes support for planning and pre-investment studies, policy development, legal and regulatory reform, business development and capacity building (including for knowledge management and monitoring and evaluation).

Administrating Organization

Secretariat or Administrative Unit The CIF Administrative Unit supports the work of the Strategic Climate Fund Trust Fund Committee and other committees, including the SREP Technical Committee. It provides recommendations and reporting on operational and financial matters to the CIF governing bodies.
The Unit is housed in the World Bank Group’s Washington DC offices and is comprised of a small professional and administrative staff.
Trustee The World Bank (International Bank for Reconstruction and Development) acts as Trustee for all CIF, including the SREP.

Fund Finance and Access Modalities

Conditions and Eligibility Requirements The SREP prioritises low-income countries for participation. Eligibility Criteria: To access SREP funding, a country must:

  • Be eligible for Official Development Assistance (ODA) as per the Organisation for Economic Co-operation and Development’s Development Assistance Committee (OECD/DAC) guidelines
  • Have active programmes with Multilateral Development Banks (MDBs) to ensure effective implementation and coordination of SREP-funded initiatives.

Country selection is based on the following criteria, as outlined in the 2010 CIF document “Criteria for Selecting Country and Regional Pilots under SREP”:

  • A transparent assessment of energy needs, including:
    • High dependence on conventional fossil fuels for electricity generation
    • Low rates of electricity access
    • Significant reliance on traditional biomass for thermal energy
  • A clear government interest in adopting a programmatic approach to large-scale renewable energy deployment as part of a low-carbon development pathway
  • Demonstrated institutional capacity to design and implement large-scale SREP-supported programmes
  • Consideration of regional diversity, with a special emphasis on Sub-Saharan Africa
  • Existence of significant renewable energy resource potential, including solar, wind, geothermal, small hydropower (≤10 MW), and biomass

Project selection within SREP places emphasis on:

  • Poverty reduction impact: Preference is given to projects that deliver strong poverty alleviation benefits
  • Broader development benefits: Economic, social, and environmental outcomes are key selection criteria
  • Scalability and replicability: Proposals should build on lessons from pilot or demonstration projects (e.g., those funded by the GEF), and show clear potential for:
    • Overcoming market and institutional barriers
    • Demonstration effect beyond the immediate project context
    • Catalysing private sector investment to support long-term scaling up
Accessing the Fund
Access Modalities – Only the MDBs participating in the CIF, namely the African Development Bank (AfDB), Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), Inter-American Development Bank (IDB), and the World Bank Group (including the International Finance Corporation) are authorised to access CIF funding, including financing under the SREP.
Accessing the SREP follows a pre-programming and programming phase with several steps:
Pre-Programming Phase

  1. SREP Sub-Committee (SC) agrees upon the number of country or regional pilots and criteria for country selection
  2. CIF Administrative Unit, through MDBs informs countries and invites expression of interest
  3. Selection of pilots is conducted by SREP-SC based on Expert Group Reports
  4. MDB scoping mission are conducted at the invitation of governments to assess readiness and capacity for investment plans
  5. If requested, MDBs advance preparation grants and investment plan preparation grants to assist in the development of investment plans.

Programming Phase

  1. SREP-SC endorses Investment Plan
  2. Investment and financing proposals are developed
  3. SREP-SC approves financing for investments and other proposals.
Financial Instruments – The SREP offers a diverse array of financing instruments designed to support renewable energy initiatives and catalyse additional investments from both public and private sectors. These instruments include: Grants, contingent grants or loans, concessional loans, guarantees and equity investments.
These financial instruments are often blended with resources from the International Development Association (IDA) and other concessional financing sources to leverage additional public and private sector investments. SREP utilises financial instruments already available within MDBs, including:

  • Output-Based Aid (OBA): This approach enhances the affordability of renewable energy services by subsidising a portion of the capital costs. The subsidy is typically disbursed upon verification of service delivery to targeted beneficiaries, ensuring that funds are used effectively to expand access to renewable energy
  • Investment Financing: Utilising financial instruments such as quasi-equity financing and capital cost buy-downs to support grid-based renewable energy power generation and associated transmission and distribution investments, thereby improving their financial viability
  • Credit Enhancement Facilities: These facilities provide mechanisms like partial risk guarantees to leverage trade finance and short-term working capital. They offer partial risk coverage for loans directed toward grid-based renewable energy investments, businesses, and rural consumers who may lack sufficient credit history or collateral
  • Financial Intermediation: Grants that are on-lent as loans through domestic financial institutions, including microfinance institutions, to support renewable energy investments at the local level
  • Incremental Budget Support: Additional funding for national or regional programmes delivering community services such as healthcare, water supply, and education. This support finances renewable energy hardware and services, including arrangements to ensure long-term maintenance and repair.
Accreditation process – There is no accreditation process for the CIF as only the MDBs can access and implement CIF funding, including for the SREP.
Overview of implementing entities – The World Bank Group, the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, and the Inter-American Development Bank are the implementing agencies for SREP investments.
Nature of recipient country involvement – SREP programmes are country-led, build on and draw benefit from national policies so that renewable energy is fully integrated into national energy plans. SREP activities are designed and implemented with the full and effective participation and involvement of, and with respect for the rights of, Indigenous Peoples and local communities.
The government of recipient countries needs to appoint a national focal point for SREP. This focal point works as a liaison agency and is most commonly led by a deputy minister, a government commissioner or other representatives of government ministries. The national focal point’s responsibilities include:

  1. obtaining project/programme-level data from the SREP project implementation units/teams
  2. aggregating data at the country programme level
  3. submitting the information to the CIF Administrative Unit on an annual basis.
Allocation criteria – According to SREP financing modalities, countries assessed as being at high or moderate risk of debt distress are to receive SREP funding primarily or entirely in the form of grants, in line with international debt sustainability frameworks. Countries assessed as being at low risk of debt distress may receive a mix of grants and concessional loans, or only concessional loans, depending on their individual debt sustainability assessments and financing needs.
Initially, indicative grant allocations for SREP pilot countries ranged from USD 25 million to USD 50 million. Over time, these allocations have become more flexible and context-specific, with final amounts and financing terms determined by several factors, including the country’s renewable energy investment needs, the capacity to absorb and implement funding effectively, the geographic balance and strategic priorities of the SREP Technical Committee.
Safeguards, Gender and Indigenous Peoples
Safeguards – The safeguards included at the project level under the SREP depend on the partner multilateral development bank implementing the project. The projects are therefore subject to the environmental and social safeguards of the implementing MDBs.
Gender – SREP falls under the CIF Gender Policy and the CIF Gender Action Plan. While the Gender Policy provides a governance framework for gender integration in the CIF, the Gender Action Plan is “committed to mainstreaming gender in CIF policy and programming, in support of gender equality in climate resilient, low-carbon development investment across the CIF portfolio”. The CIF Gender Action Plan is currently in Phase 3 and has two main aims:

  1. to deepen upstream support to MDBs and countries on gender technical assistance for Investment Plan and project design
  2. to enhance gender monitoring and reporting, and knowledge and capacity.
Indigenous Peoples – SREP is subject to CIF governance which treats Indigenous Peoples as a core stakeholder group. While there is a separate CIF Gender Policy, there is no equivalent CIF Indigenous Peoples Policy. Instead the existing policies and approaches of the MDBs implementing SREP projects and programmes apply.
Indigenous Peoples are granted representation in CIF governance. With their status of active observers, Indigenous Peoples have the opportunity to advocate on behalf of their constituents in the CIF Trust Fund Committees and the SREP Technical Committee.

Fund Governance

Decision Making Structure The SREP is one of three targeted programmes under the Strategic Climate Fund (SCF), which operates under the broader Climate Investment Funds (CIF) framework. The SCF has a Trust Fund Committee, and each of its programmes, including SREP, has its own dedicated Technical Committee (e.g., SREP Technical Committee).
SCF Trust Fund Committee
The SCF Trust Fund Committee is in charge of overseeing the operations and activities of the SCF, which includes the SREP. It gives equal weight to representatives from donor and recipient countries. The composition of the SCF Trust Fund Committee consists of representatives from:

  • Eight recipient countries
  • Eight contributor countries
  • • Select Observers, namely one each from Green Climate Fund (GCF), Global Environment Facility (GEF), United Nations Development Programme (UNDP), United Nations Environment Programme (UNEP), United Nations Framework Convention on Climate Change (UNFCCC), United Nations Permanent Forum on Indigenous Issues (UNPFII)
  • In addition, there are active observers with the right to intervene in SCF Trust Fund Committee meetings, namely four from civil society organisations, two from the private sector, and two from Indigenous Peoples.

The list of actual SCF Trust Fund Committee members is available at: https://www.cif.org/strategic-climate-fund-governance-structure
SREP Technical Committee (SREP-TC)
The SREP Technical Committee was established to oversee and decide on the operations and activities of the SREP.
Composition of the SREP Technical Committee:

  • Six representatives from donor countries to the SREP
  • Six representatives from eligible recipient countries were selected on a regional basis and identified through a consultation with recipient countries
  • Select observers, including four from civil society organisations, two from the private sector, and two from Indigenous Peoples.

Decision-making is achieved through consensus.
The list of actual SREP Sub-Committee members is available at: https://www.cif.org/scaling-renewable-energy-program-low-income-countries-technical-committee

Accountability Mechanisms SREP
SREP has an internal monitoring and reporting system that tracks progress in scaling up deployment of renewable energy solutions. The CIF Administrative Unit as well as Implementing MDBs and in-country stakeholders are responsible for tracking the performance of SREP investments. The results indicators incorporated to evaluate the impact and outcome of SREP-funded activities include:

  1. “Annual electricity output from renewable energy;
  2. Number of women and men, business, and community services benefitting from improved access to electricity and/or other modern energy services;
  3. Increased public and private investments in targeted subsectors;
  4. Capacity from renewable energy (MW).”

CIF
The CIF have initiated and published dozens of independent evaluations, many focused on transformational change, gender, stakeholder engagement, and private sector mobilisation:
Participation of Observers and Stakeholders In designing the CIF, consultations took place with potential donors and recipients, the United Nations family, other MDBs, civil society organisations, and the private sector. The CIF were created on agreement from some 40 developing and industrialised countries. Non-governmental actors have a direct role in the governance of the fund as detailed above. Representatives of NGOs and the private sector were also part of the expert group.
Observers
The SREP Technical Committee invites a number of active observers to attend its meetings, including representatives from four civil society organisations (one from Asia, LAC, Africa, and Developed Countries respectively), two Indigenous Peoples representatives, and two private sector entities (one from a developed country and one from a developing country).
These observers can add items to committee agendas, recommend external experts, and request verbal interventions during discussions.
The list of actual SREP-TC observers is available at: https://www.cif.org/scaling-renewable-energy-program-low-income-countries-technical-committee Expert Group An Expert Group was established by the SREP Sub-Committee to make recommendations on the selection of country or regional programmes. The Expert Group consists of six members with a wide range of scientific, economic, social, environmental, development, policy and/or governance/institutional expertise. Partnership Forum
The CIF Partnership Forum is a key convening platform that enables dialogue on the CIF’s strategic directions, results, and impacts. While historically held on an annual basis, recent editions (e.g. 2018 and 2023) reflect a non-fixed frequency.
Forum participants include a diverse range of stakeholders: donor and recipient country representatives, MDBs, UN agencies, the Global Environment Facility (GEF), the Green Climate Fund (GCF), the UNFCCC, the Adaptation Fund, bilateral development partners, Indigenous Peoples, civil society, private sector entities, youth, and technical experts.
The Forum promotes inclusive, multi-stakeholder engagement through plenary dialogues, thematic panels, and networking opportunities, and serves as a platform for shared learning and reflection on CIF’s impact in climate finance.
Transparency and Information Disclosure Pledges, deposits and funding decisions for SCF and its subsidiary funds (PPCR, SREP and FIP) are reported to the SCF Trust Fund Committee in bi-annual trustee reports. Details on individual projects are made public and available at: https://www.climateinvestmentfunds.org/projects Disclosure Policy With respect to information disclosure, the CIF largely rely on the public information polices of the partner MDBs which implement CIF projects and programmes. In addition, in May 2009, the Trust Fund Committees approved a disclosure policy supporting in-country disclosure of country-owned investment plans and strategies (developed under the Trust Funds) prior to their submission to a CIF Committee for approval.
Proposed plans are also posted on the CIF website no later than three weeks prior to review of the proposal by a Committee. In the case of proposed programmes and projects, an information document describing the proposal is to be made public at least two weeks prior to a decision on the funding of the proposal.
The policy recognises that a country or a project proposer may have justifiable reasons for not publicly disclosing all information in an investment plan or project, and in exceptional cases, subject to Committee approval, certain information may be kept confidential.
Other Issues Raised