EPP developed the Peace Renewable Energy Credit (P-REC) as a solution for corporate clean energy buyers to support high-impact renewable energy generation and expand energy access for communities in fragile settings. P-RECs represent part of the mosaic of private sector climate solutions that address the renewable energy finance gap, which requires a tripling of annual financing for renewables to keep global warming under 1.5° Celsius.
P-RECs are a tested and proven solution for corporate clean energy buyers, with ten total deals already executed in Chad, Democratic Republic of Congo (DRC), Nigeria, Somalia, and South Sudan. They help buyers maximize the decarbonization and social impact of their procurement and sustainability strategy.
P-RECs may also represent a solution for market actors besides corporate buyers. There is an opportunity to explore how to (re)frame the value proposition and potentially modify the transaction structure so that additional market actors—ranging from corporate social impact teams and philanthropic entities to impact investors and climate venture capital (VC) firms—can support P-REC projects. P-RECs can support these market actors with making and reporting progress toward their respective environmental and social impact goals.
In collaboration with the Three Cairns Fellowship at Columbia Business School, EPP has begun investigating the opportunity to expand the global P-REC market and cultivate additional demand from market actors beyond corporate clean energy buyers alone. This research is currently assessing the opportunity to broaden the base of potential P-REC buyers and financing avenues to support P-REC projects opportunity by:
Clarying the value proposition to additional market actors in terms of how to communicate the value proposition of P-RECs differently to additional market actors besides corporate clean energy buyers;
Identifying potential new climate finance solutions to grow demand for and increase investments in P-REC projects.
By better understanding how EPP could reframe the value proposition of P-RECs to new market actors and potentially introduce new financing mechanisms by which these market actors can support P-RECs and related community impact projects, EPP could expand the pool of options to provide capital for energy access in fragile countries. Some examples of potential new financing options for these additional market actors to support P-REC projects may include the following:
Corporate social impact teams: The potential for corporate teams—particularly those in the fashion and beauty, food and beverage, and hospitality industries—to integrate targeted P-REC projects into their social impact strategies, whereby the social benefits serve as the primary benefit of P-REC projects and the environmental benefits serve as the secondary benefit
Philanthropic entities: The potential for philanthropies, including corporate philanthropies, to make donations in service to their respective environmental and/or social impact missions to support the financing of P-REC projects
Impact investors: The potential for impact investors—such as family offices, high net worth individuals, and firms with a dedicated impact-first portfolio—to add P-REC projects to their investment portfolios
Climate VCs: The potential for climate VCs to dedicate a specified portion of their fund and/or profits (e.g., 1% of profits, fixed annual amount, individual project sponsorship, or in-kind support) to help finance P-REC projects, demonstrating support for solutions aligned with their investment impact priorities that deliver decarbonization, energy access, and community benefits and complement their portfolio company investments.
To contribute to this research currently underway, please contact Doug Miller, Director of Market Development, at dmiller@energypeacepartners.com. EPP will share more insights once this preliminary stakeholder analysis is completed in Spring 2025.