Results-based financing for renewable energy

The Netherlands Enterprise Agency (RVO) and RBF

Growing clean energy markets requires innovation and investment from private companies. RBF offers a flexible and affordable way to bring more public funding into commercial markets. Instead of offering grants upfront, RBF pays companies once they deliver clean energy products and services according to agreed targets.

We have implemented and managed RBF activities within our programmes since 2014. These programmes include SDG7 Results, Energising Development (EnDev), Strengthening the Entrepreneurial Ecosystem for Clean Cooking (SEE Clean Cooking) and Regional Clean Cooking Action West Africa (ReCCAWA). RBF helps energy companies lower product prices, expand into remote rural areas and serve lower-income households that commercial markets often do not reach. 

Lessons on RBF

RBF needs to be well designed to be successful as a financial tool. RBF projects should ensure accountability, but should also avoid making the reporting process too difficult for companies to implement. They should also protect small businesses from financial risks and adapt to the local market.

Over 10 years of managing RBF projects has taught us these lessons:

• Focus on a single goal: Effective RBF facilities focus on 1 main goal rather than trying to reach several complex goals at once. 
• Understand business cash flow: Requiring companies to buy products upfront can create problems for small and medium-sized enterprises (SMEs). RBF should often be combined with early business advice or short-term loans. 
• Balance verification and administrative workload: Checking systems must be strict enough that public money is spent correctly, but simple enough to avoid unnecessary paperwork for small businesses. 
• Combine RBF with broader market support: RBF works best when combined with business coaching, consumer awareness campaigns and supportive government policies and regulations.

RBF results

Our RBF projects have achieved the following results:

• Business growth in remote areas: Financial incentives have encouraged clean energy companies to develop sales networks in remote and underserved areas.
• Lowering costs for customers: Targeted subsidies have lowered upfront prices, making solar home systems and clean cookstoves affordable for lower-income families. 
• Supporting business innovation: We have helped small and new energy companies develop verified sales records, making them more attractive to investors and banks. 
• Expanding clean cooking: We have helped clean cooking companies supply more biogas and efficient cookstoves through the African Biodigester Component (ABC) and the Higher Tier Cooking Component (HTCC).

Information materials

We will publish information materials on RBF below when they are available.