Synergizing Public Incentives and Private Capital: A Hybrid RAB‐RBF Framework for Low‐Carbon Energy Infrastructure Access in Low‐ and Middle‐Income Countries

ABSTRACT 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.