The Fifth Assembly of the International Solar Alliance announced the SolarX Grand Challenge in New Delhi recently. The challenge focusses on promoting entrepreneurship, innovation and start-ups, particularly in decentralized solar energy applications that contribute to livelihoods, such as agriculture, health, and small-scale industrial applications. ISA hopes this would foster a three-fold benefit – promotion of the solar energy sector, thinning of the gap of the energy crisis, and promoting a solar start-up ecosystem.
ISA Assembly also approved Solar Facility, a payment guarantee mechanism to mitigate risks associated with solar projects in Africa. Ministers from 20 countries and delegates from across 110 member and signatory countries and 18 prospective countries approved the Solar Facility, a payment guarantee mechanism which is expected to stimulate investments into solar through two financial components: Solar Payment Guarantee Fund and Solar Insurance Fund.
The Solar Facility is expected to stimulate high potential solar technologies, by attracting private capital to flow into underserved markets in Africa, while ensuring a payment and insurance mechanism as a first loss guarantee. The ISA will soon operationalize Solar Facility to crowdsource investments from various donors across the globe and proposed projects in Africa will be able to purchase payment guarantees or partial insurance premium from these funds.
With COP27 scheduled in November 2022 the ISA is playing a key role to build a broad coalition in favour of ambitious climate commitments. It is expanding application of solar solutions for agriculture, scaling solar mini-grids and solar rooftops, as well as e-mobility and green hydrogen initiatives.
Dr Ajay Mathur, Director General of International Solar Alliance, explained how ISA is looking to support projects by reducing lenders’ apprehensions and enabling finance to flow for projects that otherwise may not have received funding. The payment guarantee fund will only provide a partial guarantee. With minimal default, the guarantee fund would enable investments in geographies that do not receive investments. In addition, the Solar Insurance Fund will reduce the burden of insurance premium for solar developers in the pre-revenue phase of the project. It will offset the cost of insurance for a specified period.
The International Solar Alliance is an international organisation with 110 members and signatory countries. It works with governments to improve energy access and security worldwide and promote solar power as a sustainable way to transition to a carbon-neutral future. ISA’s mission is to unlock US$ 1 trillion of investments in solar by 2030 while reducing the cost of the technology and its financing.