Common Risk Mitigation Mechanism
CRMM

What is the Common Risk Mitigation Mechanism?

The historic Paris Agreement of 2015 stated “Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development“ (article 2.c). To achieve this objective, on May 18th 2017 in Delhi, understanding that one of the biggest obstacles to solar deployment is the cost of capital (~70% of total installation costs), 16 countries of the ISA jointly commissioned of a study to define and structure the Common Risk Mitigation Mechanism (CRMM) for solar power generation projects. This instrument, if implemented, will dramatically lower the cost of finance for renewable energy and the overall price of electricity. Even more significantly, CRMM will vastly enlarge the total size of the renewable energy market by making investments in renewables widely available to institutional investors.

The proposed CRMM will offer a simple and affordable tool that will create a secure environment for private institutional investment in solar assets. The instrument will help diversify and pool risks on mutualized public resources and unlock significant investments. It would underwrite investment risks and thus create a significant leverage to increase direct investments.

The study was entrusted by the ISA Interim Secretariat to a task force chaired by Terrawatt Initiative (TWI), the World Bank Group, the Currency Exchange Fund (TCX), the Council on Energy, Environment and Water (CEEW) and also the Confederation of Indian Industries (CII).

CRMM Study

The final version of the study should be presented during COP23 in Bonn, before launching the fundraising and operationalization phases.

The study for CRMM is divided into 8 work streams, each tackling a specific aspect of the instrument:

  • General design of the instrument
  • Detailed design of the instrument – mechanisms and provisions:
  • Capitalisation requirements and financial model design
  • Management and Governance
  • Operating model
  • Legal and tax model
  • Stakeholder toolkit
  • Implementation

Each workstream is managed by a Project Manager (WSPM), who plan and oversee the smooth progress of the work, and ensure that Contributors are always aware of the objectives, expectations and timelines.

A Lead Contributor (WSLC) is also appointed in each workstream provide intellectual leadership and oversee the drafting of the section of the study corresponding to their work stream. They organize the work of the Co-Contributors (WSCC) in the work stream. They resolve intellectual inconsistencies between work streams under the supervision of the Task Force. WSPM and WSLC report directly to the Task Force, that manages the study overall. The Task Force is led by a bureau: Chairperson (Jean-Pascal Pham-Ba, Terrawatt Initiative) & Secretary (Kanika Chawla, CEEW).

We need you!

The CRMM is a collective work, and we want to gather as many relevant stakeholders as possible. We are looking for prominent experts from leading private and public organizations in finance, insurance, economics, development banks, consulting firms, law firms... As a contributors you will enjoy an exclusive and early access to research and planning as well as results of the program work.

Lead contributors will also enjoy the following benefits:

  • TWI Honorary Member status,
  • Logos on all relevant publications and communications (papers, website, pamphlet),
  • Logos during all relevant events,
  • Quotes in the Press Releases and social media,
  • Co-authorship as Lead Contributor on the papers produced by their work stream,
  • Exclusive access to the Founding Members of the Terrawatt Initiative, to the Members of the Task Force and to the Leaders Coalition.

Co-contributors will also enjoy the following benefits:

  • Logos on all relevant publications and communications (papers, website, pamphlet),
  • Logos during all relevant events,
  • Quotes in the Press Releases and social media,
  • Co-authorship as co-contributor on the relevant papers produced by their work stream,
  • Exclusive access to the Founding Members of the Terrawatt Initiative, to the Members of the Task Force and to the Leaders Coalition.

Want to know more?

Feel free to contact us at : [email protected]

In collaboration with:

The World Bank Group, the Currency Exchange Fund (TCX), The Council on Energy, Environment and Water (CEEW) and The Confederation of Indian Industries (CII)

Sponsor countries:

Argentina, Australia, Burkina Faso, Cameroon, Chad, France, India, Ivory Coast,
Mali, Namibia, Niger, Nigeria, Senegal, Seychelles, Uganda, Yemen