To bolster investments in solar power projects, the International Solar Alliance (ISA), in its General Assembly meeting here on Tuesday, approved the ‘Solar Facility’, a payment guarantee mechanism expected to stimulate investments into solar projects through two financial components — a Solar Payment Guarantee Fund and Solar Insurance Fund.
The thrust of the facility is to attract private capital to flow into “underserved markets” in Africa. The ISA would aim to crowdsource investments from various donors across the globe and proposed projects in Africa would be able to purchase payment guarantees or partial insurance premium from these funds, said a statement from the ISA.
“With the Solar Facility ISA is looking to support projects by reducing lenders’ apprehensions and enabling finance to flow for projects that otherwise may not have received funding,” said ISA Director General Ajay Mathur. “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. We are grateful to the ISA Assembly for driving the solar agenda and helping catalyse growth in the global clean energy sector,” he said.
The assembly is the apex decision-making body of the 110-member ISA that 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 (₹80 lakh crore) of investments in solar power by 2030 while reducing the cost of the technology and its financing.
Published - October 19, 2022 02:56 am IST
