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This research paper proposes a Global Credit Guarantee Facility (GCGF) to reduce the high cost of capital for renewable energy projects in developing economies, outlining three funding scenarios and their potential impact on risk premia and credit ratings.

The Climate Policy Initiative (CPI) proposes the establishment of a Global Credit Guarantee Facility (GCGF) to reduce the cost of capital for renewable energy investments in emerging markets and developing economies (EMDEs). The facility would primarily mitigate credit risk—including sovereign, off-taker, and average foreign exchange risk—through partial guarantees, while transferring political and residual FX risks to existing institutions like MIGA and TCX.