Convergence awarded a proof of concept grant under the Gender Responsive Climate Finance Window to Camco for the design and launch of a $100 million blended finance vehicle, Transforming Island Development Through Electrification and Sustainability (“TIDES”), to support the development of renewable energy projects through partnering with local developers in the Pacific Islands.
The Pacific Islands rely heavily on diesel for electricity generation, specifically Islands like Tonga where imported diesel accounts for 90% of the electricity generation. Such dependence not only escalates costs but also exposes the islands to significant supply chain and climate-related risks, adversely impacting economic stability and disproportionately affecting women. Most funding for energy comes from public institutions/donor funding or funding directly from project developers balance sheets. More than often, financial options have considerably long approval processes; strict project finance requirements; and require on balance sheet financing. They also tend to overlook the gender component in climate initiatives which is critical to ensuring inclusive development.
Recognizing the central role that clean and affordable energy has in growing sustainable and inclusive economies, Camco aims to launch TIDES which introduces an innovative aggregation structure, pooling a portfolio of renewable energy projects to facilitate scalable business models that yield both economic returns and positive climate and gender impacts. TIDES will invest across three thematic priorities to spur Pacific Island’s clean energy transition: businesses and projects that reinforce grid power, businesses serving commercial and industrial power and energy efficiency requirements and businesses providing reliable, affordable renewable energy-based solutions and productive use equipment to rural and remote communities’- which results in savings in cost and emissions at both national and local levels. Moreover, TIDES is supported by the Market Development Facility (MDF), which enhances the project's impact by filling crucial market gaps. The MDF will provide technical assistance grants, results-based financing, and loans for development phases to support essential capacity building. Overall, TIDES aims to support 83 megawatts of renewable energy generation capacity, avoiding 2.3 million tons of carbon emission, creating 500 new jobs opportunities for women and providing first-time energy access to over 50,000 people, including 35,000 women and girls.
Previously, Convergence supported the initial design of this vehicle with a feasibility study grant under the Indo-Pacific Design Funding Window, enabling Camco to establish a project pipeline, engage with potential investors and determine the initial financial and legal structure of the vehicle. Building on this foundation, the proof of concept grant will help launch TIDES, further enhancing its design and operational framework.
Design question and learning potential for the market: How can a blended vehicle be tailored to prioritize gender inclusivity while attracting investments at scale for a diverse portfolio of renewable energy projects in the Pacific Islands?
TIDES is committed to increasing the participation of Pacific and women-owned and managed businesses in the renewable energy sector, principally through its development partner network and partnerships. Camco will partner with local Development partners to efficiently originate and aggregate multiple projects efficiently, providing funding, technical assistance, and project preparation support. By utilizing donor first-loss capital to de-risk investments for other stakeholders, TIDES aims to attract additional capital and develop an inclusive energy sector appealing to regional investors.
Using the proof-of-concept grant, the vehicle aims to generate economic development by targeting direct community benefits for women. TIDES will work with development partners to increase female participation and gender equality in their companies. This will be done through their MDF technical assistance component which will provide capacity building support to undertake gender baseline assessments and establish concrete and measurable gender action plans. Moreover, technical assistance will also be used to increase capacity of the target development partners to enhance their bankability and increase pipeline of investable projects in the region while also enabling projects to overcome the initial barriers to implementation.
