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International Solar Alliance to Introduce ‘Solar Facility’ Financial Mechanism to Boost Investments

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International Solar Alliance to Introduce 'Solar Facility' Financial Mechanism to Boost Investments

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On October 18, the International Solar Alliance (ISA), held its fifth general assembly. It approved the creation of the “Solar Facility”, a financial instrument that will encourage investments in solar energy through insurance funds and payment guarantee. RK Singh, the Union power minister, was re-elected president of the ISA. He announced that France and India will soon sign an agreement to support India’s green hydrogen mission.

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Through two financial components, the “Solar Facility” will drive investment in the solar sector, particularly in Africa. These are the solar payment guarantee fund (solar insurance fund) and the solar payment guarantee fund (solar payment fund). The Solar Facility is expected stimulate high-potential solar technologies by attracting private capital into underserved African markets. It also provides a payment and insurance mechanism to cover the first loss guarantee. After its fifth Assembly, the ISA announced that the Solar Facility will soon be operationalized by the ISA to crowdsource investments from different donors around the world. Proposed projects in Africa will then be able to buy payment guarantees or part of their insurance premiums from these funds.

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Minister Singh spoke with reporters and stated that the goal of ISA is to provide electricity access to approximately 700 million people who do not currently have access to electricity. The past two years have provided multiple reminders of the dangers of global dependence on fossil fuels. We have the tools to combat these issues, and technology development is ensuring that more efficient resources will be made available in the future. Now it is up to us how fast we can implement these. We also have to ensure that the energy transition is a success in all parts of the globe.

“Also France will soon partner with India for green hydrogen. Singh said that we have already partnered for other renewable resources but green hydrogen will be our latest.

According to the union minister, India’s extensive experience in solar power will allow it to provide consulting, assist them (African countries), in aggregating their electricity demands, designing bids for them and rolling out capacities, transmission, distribution, among other things.

The ISA is an international organization with 110 signatory and member countries. It works in partnership with governments to increase energy access and security around the world and to promote solar power as an environmentally-friendly way to transition to a low-carbon future. The mission of ISA is to make $1 trillion in investments in solar energy by 2030 and reduce the costs of technology and financing. It encourages solar energy use in agriculture, power generation, and health. ISA member nations are driving change through the adoption of policies and regulations, sharing best practice, agreeing to common standards and mobilizing investments. 15 countries signed and ratified the ISA Framework Agreement on December 6, 2017.

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The ISA Assembly approved the SolarX Grand Challenge. This challenge will focus on innovation and start ups, especially decentralised solar energy applications that can contribute to livelihoods such as agriculture, small-scale industrial applications, and health. This will promote a threefold benefit: promotion of solar energy sector, narrowing the gap in the energy crisis, and encouraging a solar start up ecosystem.

Dr Ajay Mathur is the Director General of International Solar Alliance. He stated that the payment guarantee fund can only guarantee a portion. The guarantee fund will allow investments in areas that are not eligible for investments, provided there is minimal default. The Solar Insurance Fund will also reduce the cost of insurance premiums for solar developers during the pre-revenue stage of the project. It will cover the cost of insurance for a specific period. He expressed gratitude to the ISA Assembly, which helped catalyze growth in the global clean-energy sector and drove the solar agenda.

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