The International Solar Alliance (ISA) has announced a significant boost to its Global Solar Facility (GSF), a payment guarantee fund aimed at spurring investments in solar power projects. A capital contribution of $35 million is set to bolster the GSF’s mission of catalyzing solar investments in underserved regions across Africa. The GSF, approved by the ISA Assembly last year, is expected to attract private capital into various solar initiatives, including off-grid solar projects, rooftop solar projects, and productive use solar projects.
India’s government is considering a $25 million investment in the GSF, complemented by a $10 million commitment from the ISA. Moreover, Bloomberg Philanthropies and the Children’s Investment Fund Foundation (CIFF) have also announced their support for the GSF.
The Global Solar Facility is poised to address a considerable gap in renewable energy investments, estimated at $12.5 trillion globally. It focuses on stimulating investments in off-grid solar in underserved areas, striving to bridge the divide by providing investment security and financial incentives.
Shri R K Singh, Minister of Power and New & Renewable Energy for the Government of India and President of the International Solar Alliance Assembly, stated, “The GSF aims to leverage investments to accelerate the transition to solar energy. The target for the GSF is to raise $100 million USD. Africa has immense potential in deploying solar energy capacities, yet due to investment risks, the region has not been able to leverage its potential. The GSF aims to address this challenge and provide security to investments. India’s success in attracting private sector investments serves as a model. In the years to come, we will look at globalizing the GSF.”
The Director General of the International Solar Alliance, Dr. Ajay Mathur, emphasized that the GSF’s support from international donors like the Government of India, CIFF, and Bloomberg Philanthropies will boost investor confidence in decentralized solar applications in Africa, potentially revolutionizing global investment patterns.
The ISA’s goal for the GSF is to enable $10 billion in investments, which could provide clean energy access to 35-40 million African households by 2030, benefiting approximately 200 million people in the region.
Dr. Mathur explained the pressing need for the GSF, stating, “The world requires an investment of $12.5 trillion in renewable energy and $23 billion in off-grid solar by 2030. The ISA, through its Global Solar Facility, is stepping up as current global solar investment falls woefully short, constituting only 10% of the required amount for achieving net-zero emissions.”
The GSF is part of the effort to rectify profound disparities in renewable energy investments, with developing countries receiving only 15% of 2022’s investments. In contrast, investments in North America are 41 times higher, and in Europe, they are 57 times greater.
The ISA highlighted the urgent need to diversify investments in solar energy in Africa, given its vast solar potential and the fact that Africa possesses only 1.3% of the world’s installed solar capacity. With nearly 600 million people in Africa lacking access to electricity, the case for distributed solar power projects is compelling.
Following the launch of GSF at COP27, the ISA Secretariat has been engaging in discussions with potential investors, including member countries, development finance institutions, pension funds, and potential investment managers worldwide. The ISA has also signed Memoranda of Understanding (MOUs) with various organizations to facilitate investments through the GSF in Africa.
In the future, the GSF plans to expand its reach to regions such as Asia, Latin America, and the Middle East, tailoring Regional Facilities to meet specific requirements. Additionally, the GSF intends to invest in innovative technologies, support startups for faster solar energy implementation, and explore emerging solar energy sectors.