Description

Aggregation platforms can support the bundling and potential securitisation of multiple small investments. They address the key issue of scale that blocks private finance interest in certain new markets and markets defined by the perceived or actual small size of the project or asset. Distributed renewable energy and energy efficiency investments are prototypical markets that would benefit from aggregation. Aggregation can also be achieved by setting up city-focused funds or structuring a bond or other asset-backed instruments that can help increase transaction size. Setting up a facility focused on building urban climate finance projects allows economies of scale and project aggregation to make projects economical.

Instrument category

Aggregation models

Implementation status

Low - limited evidence available

Instrument benefits

• By setting up a facility focused on building urban climate finance projects, economies of scale and project aggregation can make projects more economical and viable, particularly concerning the high costs of project preparation.

References

Case studies

The Warehouse for Energy Efficiency Loans (WHEEL) aggregation platform for energy efficiency financing in cities in the USA