Renewable Energy Financing in Islamic Finance : A Community Green Waqf Financing Model for Rural Electrification

Purpose – The study seeks to contribute to the literature of decentralized participation of local communities in driving renewable energy uptake in rural areas by proposing a conceptual financing model for renewable energy through leveraging the spirit of partnership among the local community, private sector, and the philanthropic sector through a community green waqf(endowment).Design/methodology/approach – This study is conceptual and relies on existing literature on energy economics and Islamic social finance to formulate a conceptual framework for renewable energy finance in rural communities. The study is conducted by synthesizing secondary data and past literature to provide evidence of the systematic conceptualization of this financing model.Findings –The study proposes the community green waqf as a financing model for renewable energy assets in rural areas by using the Islamic institutional framework of waqf. The financing model leverages the collective agency of the community, private sector, and philanthropic sector to drive renewable energy project viability and uptake.Research limitations/implications –The community green waqf financing model will potentially solve supply and demand problems associated with renewable energy use by smallholder farmers, thereby achieving green economic growth and just energy transition.Originality/value – The study contributes to further understanding the need for alternative financing models for renewable energy, focusing on rural communities by essentializing the need for partnership among the local community, impact investors, and the philanthropic sector