Increasingly the private sector is expected to finance access to modern energy services in developing countries. Yet governments and donors still have much to learn about working with business, while low-income markets are unfamiliar and risky for private investors. In this report we present some innovations and challenges in financing pro-poor energy access. We highlight the need to identify those population segments (low-income, subsistence or extreme poverty) that can be reached most effectively by public, private and combined finance models. Governments and donors should target support, incentives and policy reform to channel private investment to where it works best. This will allow them to target public finance more effectively at the poorest, who cannot be reached by market-based interventions.
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