Sustainable Energy Finance Initiative

SEFI served as the first step for mainstreaming investments in energy efficiency and renewable energy.

The Sustainable Energy Finance Initiative was launched in 2004 as a part of a collaborative effort between BASE and the United Nations Environmental Program (UNEP) to channel finance towards energy efficiency at scale and speed, globally. SEFI served as a stepping-stone for fostering a paradigm shift in the financial markets beyond the pace at which it would occur on its own. According to several studies, mainstreaming of sustainable energy investments was not proceeding fast enough to accomplish time-bound international climate targets, even within conducive regulatory environments. Therefore, SEFI was envisioned as a specialised global network to accelerate the process. 

To achieve this vision, the initiative changed the high-risk perceptions associated with sustainable financing by providing targeted information to financiers. Additionally, it equipped investors and project developers with credible tools that incorporated environmental and social factors into risk assessment and economic performance, helping secure long-term financial returns while simultaneously promoting sustainable development goals. SEFI drew attention to underserved yet promising investment opportunities and financing mechanisms by extending access to detailed reports with on-the-ground insights and curating the SEF directory, a thorough database of lenders and investors for sustainable energy.

Taking inspiration from the UNEP Finance Initiative, SEFI used modest amounts of capital to convene financiers, encouraged them to work synergistically, and catalysed public-private alliances that could share costs and lower barriers to sustainable energy investments. Coalescing diverse actors at different levels of developing energy-aligned programmes allowed them to club expertise and shield financiers against substantial inefficiencies in global sustainable energy markets, such as poor policy and regulatory consistency across nations. This practice also overcame the lack of efficient intermediation in the sustainable finance marketplace and enabled investors to source deals that responded to their impact needs. 

Many financiers were reluctant to enter the relatively uncharted territory of sustainable energy investments individually. Thus, BASE closely supported UNEP in establishing the SEF Alliance, an international coalition of public and publicly backed organisations with experience in sustainable energy, to give new entrants an extra push and reassurance. It targeted both developed and emerging markets. The Alliance included California Energy Commission, The Carbon Trust (UK), Sitra (Finland), Sustainable Development Technology Canada, Sustainable Energy Ireland, Corporación de Fomento de la Producción (Chile), and Trust Funds for Rural Development (Mexico). Members exchanged best practices, pooled resources, partnered on projects, and assisted other governments with locally adapting new or similar financing models. The SEF Alliance has produced several informative reports, offering multiple templates on fresh ways to finance sustainable energy, all of which are available on the BASE website.

The initiative concluded in 2013, after nearly a decade of providing guidance on how to tap into public sector capital and utilise it for unlocking innovation and private investment in the renewable energy and energy efficiency sectors. It laid a strong foundation for developed markets to optimise and emerging economies to strengthen their public finance approaches in these fields.

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