New Delhi: The International Solar Alliance (ISA) has decided to raise the viability gap funding for solar projects to 35% of the project cost from the current 10%, with the aim of boosting solar adoption in developing and underdeveloped nations. .
The decision was taken during the sixth assembly of the alliance on Tuesday. Ministers from 20 countries and delegates from 116 member countries and signatories were present at the meeting which was also attended by Union power minister RK Singh, president of the alliance.
Singh pointed out that a significant 80% of the world’s population, or about 6 billion people, live in countries that are heavily dependent on fossil fuel imports. He highlighted ISA’s commitment to promoting solar energy and cited renewable energy’s potential to meet 65% of global electricity demand by 2030 and decarbonise 90% of the power sector by 2050.
“Toward this end, ISA provides a grant of $150,000, or 10%, of the project cost (whichever is lower) per country per project through its viability gap financing (VGF) mechanism. The Assembly determined the range of increase to 35% of the cost of the project, depending on the capacity and needs of the countries and their respective projects,” he said.
Highlighting India’s regulatory framework that has fostered solar growth, Singh shared wishes for other nations to mirror India’s efforts. According to government data, India has a current solar capacity of 67.078 GW, comprising 16.1% of the country’s total capacity, with ambitions to scale this to 292 GW by 2030.
Through the creation of the ISA in 2015 and its expansion, India wants to position itself as a torch bearer in the renewable energy space and also wants to be the voice of the Global South.
While emphasizing the importance of green finance, Singh expressed his hope that developed nations would fulfill the commitments made during COP21, which would ensure the proliferation of renewable energy.
On Tuesday, the alliance also announced that the Global Solar Facility (GSF), a fund established by ISA to encourage investments in solar power projects, will receive a capital contribution of $35 million.
The Indian government is considering an investment of $25 million as a capital contribution in the GSF in addition to $10 million coming from the ISA, an official statement said. Mint had earlier reported that India could add $25 million to the fund.
Bloomberg Philanthropies and CIFF have also given their support to the GSF, the statement said.
Targeting an accumulation of $100 million, the GSF intends to counterbalance investment risks in Africa and stimulate the region’s vast solar potential.
Ajay Mathur, director general of ISA, praised the support from the Indian government, CIFF, and Bloomberg Philanthropies, expecting this to reshape global investment dynamics.
With an initial focus on Africa, GSF aims to expand its reach to areas including Asia, Latin America, and the Middle East. Future efforts for the GSF include funding cutting-edge solar technologies, endorsing start-ups for rapid solar deployment, and exploring emerging solar sectors.
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Updated: 31 October 2023, 08:45 PM IST
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