Toronto, September 8, 2022 – Convergence awards a proof of concept grant to Allotrope Partners (“Allotrope”) for the design and launch of a blended finance vehicle, Local Utility Project Aggregator (LUPA), that would support electric cooperatives (ECs) in the Philippines to invest in and own renewable energy (RE) projects to meet and exceed their government-mandated RE targets. This grant is awarded through Convergence’s Indo-Pacific Design Funding Window, funded by the Australian Government.
ECs are a special type of utility designed to bring energy infrastructure and development to remote areas of the 7,000 island Philippine archipelago. They are non-profit, membership-based electricity providers that can offer community-driven solutions to unlock RE at scale across the Philippines.
The Philippines has some of the highest electricity prices in Asia due to the cost of transmitting power and transporting fuel across the Philippine archipelago. LUPA aims to reduce the Philippines’ dependence on unsustainable and expensive energy sources, such as coal and diesel, by supporting EC projects to align with the government’s goals to transition 35% of its energy mix to RE by 2030.
“Allotrope is pleased to lead the effort to move LUPA into its operational phase” said Marc Stuart, CEO, Allotrope Partners. “The Philippines and its system of distributed ECs presents tremendous potential to demonstrate the kind of innovative development and financing structures for low carbon infrastructure and energy resilience that are vital to accelerate climate action and decarbonize the global economy. Convergence played a key role in supporting LUPA from its earliest stage and our team looks forward to partnering with Convergence to advance this next phase.”
Allotrope was previously awarded a grant under this window to explore the feasibility of LUPA for supporting ECs to own RE assets. Based on feedback from stakeholders during the study, Allotrope identified the need for the role of an aggregator to identify and connect individual ECs with project development and financing resources. LUPA’s model has been designed to reflect this approach. Allotrope has already engaged with some ECs and other relevant stakeholders to identify prospective pipeline projects. For the proof of concept, they expect to build on that work to implement an initial pilot project and launch a development platform entirely focused on the needs of Philippine ECs.
“We’re thrilled to support Allotrope as they embark on this next phase of LUPA,” says Joan Larrea, CEO, Convergence, “We continue to be excited about a project that uses blended finance to realize community-driven solutions that facilitate the transition to renewable energy.”
LUPA will harness the power of blended finance by leveraging a combination of commercial capital and grant funding. LUPA intends to support EC projects by financing a portion of the initial project development activities, providing technical support during the development process, and facilitating engagement between ECs, relevant development partners, and potential commercial and concessional investors. In its initial phase, LUPA will aim to catalyze more than 100 megawatts of RE projects with ECs in the Philippines via a new local corporate entity named Kapuluan Renewables that Allotrope is launching for this purpose.
About Allotrope Partners
Allotrope Partners is an international clean energy investment, incubation, and advisory firm specializing in emerging markets and technologies. They have a team of energy and finance experts based in the U.S., the Philippines, and across Southeast Asia. Allotrope jointly leads the Clean Energy Investment Accelerator (CEIA) with the World Resources Institute and the U.S. National Renewable Energy Laboratory. Through CEIA, Allotrope provides training to increase ECs’ capacity in the Philippines to meet and exceed their RE targets. Allotrope also leads the Greening the Banks (GTB) initiative to build the capacity of Southeast Asian financial institutions to actively participate in green finance. To learn more about the CEIA and Allotrope overall, please visit www.cleanenergyinvest.org and www.allotropepartners.com, respectively.
About Convergence’s Design Funding Program
Convergence’s Design Funding Program operates as a market acceleration tool providing early-stage capital to support blended finance solutions in frontier markets and nascent sectors to accelerate the number of investible transactions in market targeting SDGs. The Indo-Pacific Design Funding Window, funded by the Australian Government, provides grant funding for the design and launch of catalytic blended finance solutions focused on climate finance and/or gender equality in certain countries in the Indo-Pacific region. Please visit Convergence’s Design Funding page for submission deadlines as well as other open windows.
Convergence is the global network for blended finance. On top of market acceleration through its Design Funding program, Convergence generates blended finance data, intelligence, and deal flow to increase private sector investment in developing countries. Convergence’s global membership includes over 200 public, private, and philanthropic investors as well as sponsors of transactions and funds. To learn more, visit www.convergence.finance.