Developing countries and those countries with "economies in transition" are the target of a new 10-year, $30 million private equity fund that is designed to invest in solar technologies and businesses. The fund, called Solar Development Capital (SDC), is the work of the Global Environment Facility (GEF) and the International Finance Corporation (IFC).

"Attracting greater private sector involvement in renewable energy projects in the developing world is a prerequisite to achieving sustainable development," said Mohamed El-Ashry, CEO and Chairman of the GEF. "This is an important step in GEF's commitment to support businesses which can help countries grow their economies, improve local air quality, and help prevent climate change. By helping shoulder some of the risk of these investments, GEF brings new players into the renewable energy arena."

GEF notes that photovoltaic (PV) systems are one of the most environmentally benign and cost-effective sources of decentralized power and key to reaching the billions of citizens of developing countries that have limited or no access to the main energy grid.

SDC will focus on providing capital to companies that distribute PV products or services in un-electrified rural areas in developing nations. While GEF support will enable most of these companies to provide customer leasing or credit to overcome the high initial expense of PV systems, the project does look to show how the renewables sector can be a profitable investment for private sector firms, and that future investments do not need public sector subsidies.