It’sestimated that 90% of displaced communities lack access to electricity and 80% rely on solid fuels (firewood, charcoal) for cooking meals, resulting in protection risks, health risks, environmentaldegradationand limited pathways to economic development for conflict affected communities. To address this challenge, global progress has been made through political momentum on humanitarian energy. The past few years have seen an increasing focus on innovative finance and developing effective business models to enable sustainable market-based access to energy services in humanitarian contexts for crisis affected communities.

Innovative financing approaches, such as blended or results-based financing, carbon finance, and Renewable Energy Credits (RECs), have been effectively addressing these challenges. For example, RECs are a form of tradable commodities, where renewable energy producers can sell their produced energy as credits. For each megawatt-hour (MWh) produced, one REC is formed that can be sold to a buyer. A subcategory, Peace RECs (P-RECs), focuses on countries prone to climate vulnerability, political instability, and conflict. P-RECs have strong eligibility criteriarequiredfor projects selling the credits, to ensure high accountability to investors. These credits enable projects to solely use revenue from P-REC sales to cover the project costs,facilitatinglong-term sustainability and ensuring continuity of energy services.

Several successful public-private partnership modelsleveraginginnovative blended financing approaches have illustrated a potential pathway to scaling access to energy while reducing reliance on humanitarian funding.Using approaches like P-RECs exemplifies how innovative finance can catalyze transformative impacts. For instance, some projectsleveragethese credits to power education and health facilities in fragile settings, bridging the sustainable energy gap while creating long-term social and environmental benefits.

The inclusion of private sector and local government partners in the design process also supports the development of more holistic energy solutions better tailored to address displaced and host community needs.Yet challengesremain. Some companies and projects struggle to make the technical adjustments to their approach needed to scale successfully.Identifyingtheappropriate financingcombination and type of investor for a given business model is a key challenge, particularly for smaller and local companies. The pool of donors and investors willing to engage in a sector with high perceived risk and thin marginsremainslimited, andmore must be done to onboard new capital providers to energy delivery partners on the supply-side (e.g.energy access companies), and UN/NGOs and local community-ledorganisationson the demand-side.

This session brings together humanitarian actors, donors, investors, and company representatives. Key themes include designing workable business models, innovative financing tools for scaling access to energy, and areas where funding and technical support from humanitarian and development actors can have a catalytic effect. The goal is toidentifyactionable steps for building public-private partnerships and blended financing strategies, building on best practices of what works, whatdoesn’tand how to reach scale. Lessons from an ongoing study around “Humanitarian Energy: Failures and Learnings” will be shared as a framing to the discussion.

Potential speakers:

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