AREED in the Finance Continuum *

A key element of AREED is providing a small initial financial investment called seed capital to transform a good idea – and a capable entrepreneur - into a specific business that delivers improved energy services. This seed capital helps move enterprises along the finance continuum (see diagram above), from grants to concessional and eventually commercial forms of capital.

Some of the other gaps in this continuum include a lack of enterprise development intermediaries, too little reasonably priced patient (growth) capital and insufficient consumer and micro-enterprise finance. AREED can respond to some of these challenges directly, but must also engage new partners in the donor and finance community to fully meet the needs of clean energy entrepreneurs.

Excerpted from the REED report ‘Open for Business: Entrepreneurs, Clean Energy and Sustainable Development’.