The dashboard is a free resource that provides data on the cost of capital focused on clean energy projects in emerging and developing economies. It also provides information of the main underlying risks perceived by investors and financiers in each country as well as case studies. We hope these resources will help drive policy changes that can lower financing costs in the parts of the world that most need it. For additional information on how to estimate the cost of capital, this IEA article highlights the importance of financing costs in the energy transition, defines what financing costs are (also commonly referred to as weighted average cost of capital, or WACC) and provides both a theoretical and practical explanation of how to calculate them. For this dashboard we estimated financing costs as the weighted average of the after-tax (or all-in) cost of debt and the minimum expected equity internal rate of return (IRR).

In 2025, the third year that we have run the survey, we continued to expand our coverage in terms of geographies and technologies. We focused on collecting data from the five key countries initially within the scope of the Observatory– Brazil, India, Indonesia, Mexico, and South Africa – but also conducted additional efforts to gather data on countries including Viet Nam, Senegal, Kenya, Malaysia, the Philippines and Thailand, although the data points for these countries were comparatively fewer. We also widened the scope to include utility-scale batteries, offshore wind and hydroelectricity power, in addition to solar PV and gas power projects. In the latest survey update in 2025 we asked for WACC data of projects taking final investment decision (FID) from 2021 onwards. An analysis of the latest data can be found in this commentary.

The cost of capital is expressed here in local currencies, nominal terms and after tax. In cases where respondents to the survey provided a range instead of a single value of the cost of capital, we included the minimum and the maximum value of that range. We also made assumptions on the corporate tax or inflation in cases where respondents did not specify these values and provided responses in pre-tax and/or real terms. For inflation, when necessary, we assumed the average annual inflation of the last ten years. To convert responses in hard currency (e.g., US Dollars) to local currency, we added the difference in 10-year bond yields (between a domestic bond denominated in local currency and a US bond) and subtracted the country risk (to avoid double counting).

The more prominent data point in the graph for each of the country series represents the median of all data points: we estimated the median WACC as the average between the median of the minimum WACC values and the median of the maximum WACC values.

The underlying business models of these projects are feed-in tariffs, long-term power purchase agreements (PPAs) or contract for differences. In these models, the majority of the project revenues are defined upfront in long-term contracts (of up to 30 years, depending on the country), providing a relatively high level of price certainty over the project lifetime.

Investments with full merchant risk (fully exposed to short-term wholesale prices) are still rare. Survey results show that, as expected, WACCs for merchant projects are higher than those with revenue-supported mechanisms like PPAs, reflecting additional price and volume risks for investors. However, we did not obtain enough responses on WACCs for merchant projects to make robust conclusions yet. This is why the WACC values for merchant projects are not included in the graphs above and tables below.

During the 2023 and 2025 updates to the survey, stakeholders were asked to identify the top risks that should be addressed first to achieve reductions in the cost of capital in each country. On average, regulatory, political, bankability, currency and sovereign risks were the five key risks that were reported to need to be addressed first. Two of these (regulatory and bankability) relate to sector-specific risks, whilst the other three correspond to country-level risks that apply to energy investments and beyond. 

An caveat is that the institutions that replied to each of the survey updates were not always the same as previous updates. The difference in the pool of respondents (that may have different risk profiles and therefore risk perceptions) can therefore create “noise” in the medians, as the change from one year to the other may be due to changes in the characteristics of the sample. However, we also compared the responses of companies that replied in both years to drive conclusions.

We are very grateful to the various investors, financiers and developers that have already filled the survey. The Observatory is a long-term project, and we plan to have frequent updates in the coming years as well as new and different resources. Please email us at investment@iea.org if you would like to participate of the survey or provide feedback or suggestions.