How to leverage policy reform and PPPs to support clean energy investment in emerging markets
Article written by Chris Ahlfeldt and Ipyana Mwasambili.
Public-Private Partnerships (PPPs) are powerful tools for enabling clean infrastructure projects, especially those demonstrating new technologies or entering unfamiliar markets. In markets or countries where local financial sectors lack experience with similar ventures, PPPs can help de-risk investment and signal viability. However, one-off PPP projects are rarely sufficient to create sustainable, long-term investment pipelines. More often, structural regulatory reforms and clear market rules have a more enduring impact on attracting consistent capital and scaling up project pipelines.
Malawi offers a compelling example and found the balance between initiating a successful utility-scale PPP solar project while also rolling out sector-wide regulatory reforms with its IPP Framework, Energy Regulation Act, and Electricity Act, to enable lasting investment.
The International Energy Agency estimates that annual clean energy investment must triple to $4 trillion by 2030. This challenge is most acute in emerging markets, where renewable energy projects face higher financing costs. The International Monetary Fund estimates that in most countries, up to 90% of investment across energy supply, demand, and finance must come from private capital.
Governments play a critical role in creating a stable, transparent, and predictable environment that encourages private investment. By reducing risk through clear policies, enabling regulations, and strong institutional frameworks, they can accelerate the flow of capital into renewable energy. While many governments avoid picking technology winners to preserve market neutrality, private investors still require clear investment signals and long-term regulatory certainty. When policy incentives align with investor goals, momentum toward a clean energy transition accelerates, generating both climate benefits and economic growth.
While PPPs help allocate project risks between the public and private sectors, they require years of negotiation and intensive coordination. Governments often support PPPs with tools like tax incentives, sovereign guarantees, and off-taker risk coverage—such as payment guarantees for power purchase agreements (PPAs). These mechanisms improve investor confidence but can also strain government budgets.
Despite growth in renewable capacity, the pace of new project development remains too slow to meet climate targets. Even countries that successfully launch PPPs programs or projects often lack broader enabling environments that facilitate replication. Without scalable regulatory frameworks, PPPs often remain one-off pilots rather than catalysts for sector-wide transformation.
Malawi is a great example of how a PPP project can also serve as a springboard for deeper policy reform. With less than 15% electrification and overreliance on drought-vulnerable hydropower, the country faces urgent energy challenges. Recognizing this, the government identified electricity access as a core priority in its Growth and Development Strategy (2017–2022).
Located in Malawi’s Central Region, the 60 MW Salima Solar project was the country’s first utility-scale solar plant. Development began in 2013, with the project reaching commercial operation in 2021 after extensive groundwork and stakeholder coordination.
Key enablers included:
Private developers JCM Clean Power and local partner Matswani co-developed the project, with InfraCo Africa joining as a 25% equity partner. Their collaboration de-risked the project and attracted additional private capital. To ensure local social impact, the project also launched the EFFORT initiative with Total Land Care, supporting agricultural development and climate resilience for surrounding communities.
Building on Salima’s success, Malawi advanced several enabling reforms to build a sustainable investment pipeline:
These reforms are aligned with Malawi’s National Energy Compact, which sets targets for electricity access, clean cooking, and increased renewable generation by 2030. As a result, Malawi has positioned itself to attract ongoing private investment, moving beyond isolated PPPs to sector-wide transformation.
These reforms have led to increased private sector participation in Malawi’s energy sector exemplified by the following projects:
PPPs remain a valuable entry point, especially in high-risk or first-of-kind projects. But as Malawi’s experience shows, the most effective strategy for unlocking steady clean energy investment is regulatory reform. Clear market rules, competitive pricing structures, and institutional alignment help attract diverse developers and lower financing costs for both on-grid and off-grid projects.
This transition is not just about emissions reductions, it’s an opportunity for economic diversification, job creation, and resilience. With the right frameworks in place, the clean energy future becomes not just achievable, but inevitable.
📩 Contact Blue Horizon ECS to explore how we help clients design effective public-private investment frameworks and implement energy policy reforms that enable clean energy pipelines.
Additional References:
Ipyana Mwasambili co-authored this article as is currently working as an intern at Blue Horizon ECS. She has an interest in ESG analysis and advocacy for environmental and social issues. To reach Ipyana directly, you can contact her through LinkedIn.
Chris Ahlfeldt has over 15 years of in-depth work experience in the clean energy and sustainability industries primarily in the North American, Asian, and African markets. He’s also been involved in a number of interdisciplinary sustainable infrastructure and energy projects including climate finance strategy for an international bank, just energy transition grant deployment, renewable energy & off-grid policy, investor market entry strategy, economic development impact, and legislative/regulatory reforms in various countries in Africa (e.g. South Africa, Zambia, Thailand, Mozambique, Namibia, eSwatini, Liberia, Kenya, Botswana, Madagascar). He obtained an Energy Systems Engineering B.S. degree at Stanford University and has lectured at leading business schools on Environmental Finance, Renewable Energy, ESG, and Impact Investing. You can contact him here.
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