The agreement on the Clean Development Mechanism as a flexible instrument of emissions reduction within the Kyoto protocol opens up new perspectives for the implementation of regenerative energy projects in developing countries. Bioenergy presently covers about one third of the total energy demand in developing countries. Especially in many rural regions it constitutes the cheapest if not the only energy source, and although numerous technologies are available for increased and improved use, their application remains limited. The present study addresses the question as to why this technical potential has not yet been taken advantage of. It investigates the socio-economic and institutional challenges of increased use of renewable energy in developing countries. Based on this analysis suggestions for energy and climate protection policies are derived. The literature dealing with dissemination of technologies supports the assumption that non-technical barriers limit an increased use of renewable energy in developing countries, especially on the demand side. The study therefore parts from a system analysis of the energy sector, in which the decisions of the energy users stand in front. As a first step of this analysis, the context of the energy supply in developing countries is investigated. The study reveals that especially economic and political/institutional barriers are widespread and similar across different countries. Contrarily, ecological and socio-cultural conditions differ strongly between applications and between countries. It can be concluded that political barriers at present still limit an increased spread of renewable energy use. However, deregulation and market liberalisation processes currently under way can, if well conceived, open up considerable new potentials. An analysis of the role of the different barriers within the general context precedes their discussion with regard to the following renewable energy sources: 1) Solid combustibles are the most important energy source, based on their present use. They have the largest potential for increased use under corresponding economic and political/institutional conditions. This is especially true for modern forms of power generation. 2) Biogas has a significant ecological potential. However, it is more complex to utilise, so that a successful implementation is conditioned by many prerequisites. 3) Biofuels (non-fossil fuels) have a large implementation potential in some countries if their use is supported and subsidised. The advantages and disadvantages of such a subsidy must be carefully considered. The importance of biofuels world-wide is restricted and their utilisation potential compared to hydrogen-based fuel appears rather limited. Poorer population groups depend on renewable energy sources in a special way. Firstly, biomass is the most important, sometimes the only, energy source in these households. Secondly, many poor households earn a substantial amount of their income through the sale of biomass for energy use. It is shown that to improve the energy supply to poorer households, an expansion of commercial energy production is needed, especially of electricity. The optimal structure of subsidies is discussed. The study concludes that only those political measures that make renewable energy sources look more attractive from the view of the energy user, can contribute to taking advantage of the technical potential for the reduction of CO2. Accordingly, recommendations are derived at three different levels: 1) General opportunities for the promotion of bioenergy such as technology development, information dissemination and improvement of education. 2) Potentials at the national policy level, especially for enhancing the supply of modern energy carriers based on biomass. 3) Recommendations for the design of projects in the energy sector.