The Access to Energy Institute (A2EI) has developed a new concept of “Climate Impact Payments”, complementing existing results-based financing (RBF) schemes to fund clean energy projects and to achieve substantial carbon mitigation. A report written in partnership with Open Capital Advisors describes the mechanics of the approach and positions it in the broader context of taking urgent action to combat climate change (SDG13) and achieving universal energy access (SDG7).

At the core of the CLIPP is a data driven, fully automated set of algorithms which radically reduce the complexity of conventional RBF schemes. The processes embedded in the CLIPP use IoT and data analytics to validate installation, product and climate performance – drawing from detailed data reported automatically by the installed systems to CLIPP. Therefore, a real-time verification and monitoring of the climate impact is possible – both at a single system and at an aggregate level. This transparently describes the impact directly linked to the funding and supports distributors to achieve a faster scaling of climate-smart technologies.

CLIPP aims to show which processes benefit most from automation, digitization, and data gathering. This will help demonstrate the climate impact of the products in real time, increase the efficiency of donor funding, and streamline payments to recipients that have delivered an explicit, positive climate impact.

In order to put the concept into action, the A2EI launched its global Climate Impact Payments Platform (CLIPP) pilot on May 1st. A2EI partnered with five off-grid solar companies – Bboxx, Engie Mobisol, Victron, SunCulture and Lorentz Pumps – to test the platform specifically for productive use appliances (PUAs). A2EI’s own products will also be featured. The platform focuses on PUAs because they are very often directly in a position to achieve a positive climate effect by replacing a fossil fuel energy source or by empowering a user to better adapt to climate change.

Download the full report here.