Synergizing public incentives and private capital: a hybrid RAB‐RBF framework for low‐carbon energy infrastructure access in low‐ and middle‐income countries

Regulated asset base (RAB) and results-based financing (RBF) are key emerging infrastructure finance models, offering stable returns (RAB) and outcome-based incentives (RBF). This perspective proposes a hybrid RAB-RBF model to bridge the “viability gap” in developing regions and catalyze low-carbon energy infrastructure access where cost-reflective tariffs are unaffordable. The integration uses RBF to “write down” the initial capital cost of low-carbon energy assets. The remaining net asset value is then placed under a light-handed RAB framework. This combined approach aims to attract private capital (via RAB stability) while ensuring climate-friendly access (via RBF incentives). We argue this hybrid creates a sustainable pathway for private investment by aligning investor and societal incentives. This article outlines the theoretical basis and provides a mathematical model for tariff setting. It details necessary regulatory innovations and illustrates the financial mechanics through a hypothetical case study. Finally, it emphasizes the critical need for robust regulation and reliable funding to ensure access.