For more than two decades, the Infrastructure Development Company Limited (IDCOL) has built an almost unrivalled position in green energy finance, backed by sovereign support that few private lenders can match. This role has been additional in segments where commercial finance has historically struggled to reach, including solar home systems, solar irrigation, and remote mini-grids. Yet as the market matures, IDCOL is increasingly operating in areas that commercial banks and other non-banking financial institutions could potentially serve. Meanwhile, commercial banks are gradually beginning to demonstrate both the appetite and capacity to enter the sector but face structural barriers of their own including shorter funding horizons, limited technical expertise, and inadequate risk-sharing mechanisms. As the renewable energy market moves beyond the financing gaps of its early years, IDCOL’s greatest value may lie not in financing an ever-larger share of projects, but in enabling others to finance them. The policy implication therefore is that concessional capital should shift from substituting for private finance to catalyzing it, so that ultimately IDCOL, commercial banks, and public institutions can play complementary roles within a larger and more resilient financing ecosystem.

Author: Noor Yana Jannat
Publication Period: September 2026