There is an increasing interest among development agencies and international financial institutions in employing results-based systems when providing support to projects in developing countries. This is also the case more recently for the energy sector. Results-based systems could potentially help increase financing flows to renewable energy and energy access, however important questions remain as to under what conditions such support systems are appropriate and provide efficiency gains relative to current practices. Whether the framework is suitable is both a theoretical and empirical question, based on what we know from behavioural economics as well as through practical experience through projects. In this paper, we identify and discuss a selection of issues that should be analysed before a results-based programme is implemented and suggest a theoretical framework within which such funding programmes can be analysed.
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