PRESS RELEASE | October 13, 2021
GREENMAP has engaged the top-ranked law firm Clifford Chance to provide advice and assistance on a pro bono basis in respect of the design and implementation of the International Guarantee Trust Fund for Renewable Energy ("iTrust"). The iTrust will be officially launched in Glasgow, UK on November 4, 2021 during the UN Climate Change Conference of the Parties (COP26).
Political and financial risks, exacerbated by the impacts of the recent COVID-19 pandemic, are key deterrents to infrastructure investments in developing markets. Building the clean energy infrastructure needed to reach climate and development goals requires massive long-term investments that cannot be entirely borne by the public sector.
GREENMAP intends the iTrust to become a bridge between the growing availability of ESG-driven capital and the need to develop renewable energy generation at scale to make energy transitions accessible for all. With funding to be provided by donors, governments, multilateral and bilateral agencies, institutional investors, financial institutions and other sources, the iTrust will be set up with the specific purpose of providing program-based guarantees to all renewable energy projects awarded through public auctions by developing countries that meet certain eligibility criteria. The scheme will include (1) a revolving guarantee to cover ongoing payments by the offtaker under the relevant power purchase agreements and (2) a guarantee to backstop the obligation of the relevant offtaker or governmental agency to make early termination payments.
Sebastian Kind, Chairman of GREENMAP said: “The implementation of the iTrust is expected to significantly improve project bankability and make investments in renewables in developing countries more attractive to local and international players. More competition means lower prices for clean electricity, which contributes to poverty reduction and climate change mitigation. We are very excited about this initiative and confident about its value and impact.”
Fabricio Longhin, partner at Clifford Chance's Energy and Infrastructure Group and head of the firm's Latin American practice, commented: "Supporting the growth of renewable energy sources is one of the pillars of our Energy Transition Initiative, and we are therefore delighted to be working with GREENMAP on the design and implementation of a guarantee program to facilitate the deployment of renewables on a large scale, which is a must on the path to net zero." Differently from other guarantee products available in the market, the iTrust will couple its offering with a full documentation package, including a power purchase agreement template to be tailored to the specific requirements of each participating country while adhering to certain non-negotiable structuring principles. "This will ensure a balanced risk allocation up front and avoid lengthy and costly discussions on bankability down the road. It truly has the potential to be a game changer for the energy industry," he added.
GREENMAP stands for Global Renewable Energy Mass Adoption Program. We are an impact-driven and independent non-profit organization. Our aim and focus is to accelerate deployment of renewable generation in developing economies by directly supporting governments in the design and implementation of stable regulatory frameworks, competitive procurement processes and new financial and credit enhancement tools. We focus on implementation to facilitate bankability, foster competition, and boost the local and foreign investments needed to materialize project installations, local economic and social development and the reduction of GHG emissions.
About Clifford Chance
Clifford Chance is one of the world's pre-eminent law firms, with significant depth and range of resources across five continents. As a single, fully integrated, global partnership, the firm is widely recognized for its approachable, collegial, and team-based way of working. Its clients include corporates from all the commercial and industrial sectors, the financial investor community, governments, regulators, trade bodies and not-for-profit organizations.