Results-Based Funding for Energy Sector Development
There is increasing interest in results-based funding (sometimes referred to as Payment by Results) from both client and donor countries, but their deployment in the energy sector has been limited in comparison to other sectors such as health, ICT and transport. In response, ESMAP initiated a work program in 2011 to assess how, and under what circumstances, results-based funding can be used to improve outcomes and scale up financing for energy sector development. Under this work program ESMAP has supported the design, implementation and assessment of results-based funding— including provision of support to the Climate Investment Funds (CIF) and Energy+, and by funding two projects exploring the use of results-based funding for the promotion of improved cookstoves.
Results-based funding refers to development assistance that is provided in response to verified results (for example, households provided with a working electricity connection), rather than providing funding up-front for inputs (for example, electricity meters, wires and poles). It can include funding provided from donors or development organizations to governments for results achieved at the national level (“results-based aid”), and also funding for the delivery of basic services (such as health, water and energy) by private sector companies, community organizations, and public providers (“results-based financing”).
This cross-cutting work program includes three components:
Analytical work and guidance on when and how to use results-based funding instruments in the energy sector
Knowledge management and outreach to learn and share lessons on results-based funding programs and projects, including with our development partners
Operational support to country-based technical assistance projects to design and test out new results-based concepts and ideas
For further information, please contact Oliver Knight or Nicolina Angelou at firstname.lastname@example.org
- Results-Based Funding in the Energy Sector: An Analytical Guide
- Blog post: Paying for results: Energy+
- Energypedia articles providing definitions for the key terms: Results-based aid | Results-based financing.
- Use of output-based aid (OBA) approaches for energy access projects: Summary Table.
- ESMAP Knowledge Exchange Forum 2012 looking at the use of results-based approaches in other sectors, and implications for the energy sector: Summary and presentations.
- UK Department for International Development (DFID) program on results-based financing: Results-Based Financing for Low Carbon Energy Access.
- SNV publication: Results-based approaches to support the National Biogas Programme of Ethiopia.
- Vivid Economics presentation at OECD meeting: Results-based financing in the energy sector: incentives and sustainability.