Aggregate ERC Activities

To help ensure success of ERC activities and attract investment, an aggregation facility could provide standardized processes for ERC activities, due diligence the activities, and provide technical assistance to help ensure their effective design and ultimate success.

Expand ERC-Backed Debt Issuance

The ERC market exposure that investors face could be optimized through the ERC linkage and attracting a diversified investor base with different preferences.

Political Risk Insurance

Political risk insurance is helpful for stimulating many types of investment in Emerging markets and developing economies.

Establish an ERC Club

Establish an ERC club. Pooling demand through an ERC buyer’s club is attractive because it helps stimulate ERC supply and allows delivery risk to be distributed across buyers.

Political Risk for ERC Activities

Political risks are acute for ERC activities and arguably the most important and challenging to address to attract capital. ERC markets are fundamentally policy driven and still relatively novel, trading a credit that may not yet be considered by, let alone be clearly defined, in existing regulatory frameworks. Uncertain policy and regulatory frameworks, as well as unexpected government action, policy change including expropriation, or foreign investment restrictions, fundamentally put at risk the ability of an ERC activity to generate and transfer ERCs from a given jurisdiction.

Market Risk for ERCs

ERC market risk remains high and still needs to be mitigated directly to facilitate scaling up ERC financing while the market matures

Government Engagement and Public Sector Participation

Governments, at both a national and subnational level, play a crucial role in setting regulatory frameworks, granting activity approvals, licenses, and authorizations, as well as providing activity incentives or other support.