Context

Both Sub-Saharan Africa (SSA) and Southeast Asia (SEA) governments demonstrate ambitious commitments to clean energy within their NDCs. SSA countries aim to address energy poverty, reduce greenhouse gas emissions, and foster sustainable growth through these commitments. Similarly, SEA countries have set ambitious clean energy goals in their NDCs to support their sustainable development agendas. In addition, regional frameworks such as the ASEAN Plan of Action for Energy Cooperation (APAEC) underscore this ambition, targeting 23% clean energy in the total primary energy mix by 2025.  

SCAF III, with its focus on clean energy generation (primarily solar and wind technology with Battery Energy Storage System solutions, but also small hydro and energy efficiency solutions), directly contribute to improving the energy mix of the targeted regions. Most countries of the SCAF III’s targeted regions possess sector-specific policies and development plans aimed at deploying clean energy while simultaneously enhancing energy access.  

Two of priority countries targeted by the project illustrate how the project support transforming their NDC ambition into action:  

1. South Africa: SCAF III directly supports South Africa’s NDC commitments, which include peaking emissions by 2025 and achieving net-zero by 2050, both requiring significant private-sector involvement. By reducing carbon emissions and increasing RE capacity through private sector participation, SCAF III aligns with the country’s national policies such as the Integrated Resource Plan 2019 (IRP 2019), the RE Independent Power Producer Procurement Programme (REIPPPP), and the Just Energy Transition Strategy.  

2. Philippines: SCAF III also contributes to the Philippines’ NDCs, supporting its 75% emission reduction target by 2030, largely through private-sector engagement and facilitating a Just Energy Transition. This aligns with the Philippine Energy Plan 2020-2040, which aims for a 35% renewable share by 2030 and 50% by 2040.  

Goals and approach to transformational change 

SCAF III will be set up to address the unique structural barriers hampering clean energy deployment in Sub-Saharan Africa and Southeast Asia. The project’s primary objective is to de-risk the earlier stage development of renewable energy (RE) projects, incentivizing private capital to move further upstream in the development value chain. By partnering with mature developers, SCAF III bridges the gap to financial close, ensuring projects achieve bankability. Furthermore, by disseminating lessons learnt, the project builds investor confidence and shifts risk perceptions. As more projects reach financial close at a higher frequency, market confidence will grow, permanently shifting private capital toward earlier, high-impact stages of the development’s value chain. 

Components and support mechanisms

The Mitigation Action Facility’s support mechanism is specifically designed to meet the needs of business developers who have limited capacity and funding required to develop a greater number of green projects. By addressing the scarcity of bankable sustainable projects (through the removal of development risks), SCAF III aims to attract larger volumes of commercial investments once projects are fully developed.  

The Financial Cooperation (FC) component will serve as a first loss capital in a multi-layer capital debt fund. This proposed financial mechanism is an effective instrument designed to attract investments from both public and private sectors into GHG mitigation activities.  

The Technical Cooperation (TC) component includes capacity building for project developers related to accelerating clean energy from sustainable resources – solar, wind, hydro as well as EE solutions for industries. 

Long-term impact 

The project will indirectly mitigate 981,750 tCO₂e over its lifetime with a cost-efficiency of 0.363 EUR/tCO₂e.