New Delhi, November 01, 2023 : The International Solar Alliance (ISA) has decided to raise viability gap funding for solar projects to 35% of the project cost from the current 10%, aiming to boost solar adoption in developing and under-developed nations.
The decision was taken during the sixth assembly of the alliance on Tuesday. The meeting attended by ministers of 20 countries and delegates from 116 member and signatory countries was presided by Union power minister RK Singh, also the president of the alliance.
Singh pointed out that a significant 80% of the global populace, or approximately 6 billion people, reside in countries heavily reliant on fossil fuel imports. He emphasized ISA’s dedication to promoting solar energy and cited the potential of renewables to cater to 65% of global electricity demand by 2030 and decarbonize 90% of the power sector by 2050.
“Towards this, ISA through its viability gap funding (VGF) mechanism provides a grant of $150,000, or 10%, of the project cost (whichever is lower), per country per project. The Assembly decided to increase the range to 35% of the project cost, depending on the capacity and needs of the countries and their respective projects,” he said.
Drawing attention to India’s regulatory framework that has fostered solar growth, Singh shared aspirations for other nations to mirror India’s efforts. As per government data, India has an existing solar capacity of 67.078 GW, comprising 16.1% of the nation’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 has been trying to position to itself as a torchbearer in the renewable energy space and also trying to become the voice of the Global South.
Emphasizing the importance of green finance, Singh expressed expectations for developed nations to fulfill commitments made during COP21, ensuring the propagation of renewable energy.
On Tuesday, the alliance also announced that the Global Solar Facility (GSF), a fund formed by ISA to stimulate investments into solar power projects, is set to receive a capital contribution of $35 million.
The Indian government is considering a $25 million investment as capital contribution in the GSF in addition to $10 million coming from the ISA, said an official statement. Mint had earlier reported that India may contribute $25 million to the fund.
Bloomberg Philanthropies and CIFF have also committed their support to the GSF, the statement said. according to the reports published in www.livemint.com .
Targeting an accumulation of $100 million, the GSF is envisioned to counterbalance investment risks in Africa and stimulate the region’s vast solar potential.
Ajay Mathur, director general of ISA, lauded the support from the Indian government, CIFF, and Bloomberg Philanthropies, anticipating this to reshape global investment dynamics.
With an initial focus on Africa, GSF aspires to extend its reach to areas including Asia, Latin America, and the Middle East. Future endeavors for the GSF encompass funding groundbreaking solar technologies, endorsing startups for expedited solar deployment, and probing into nascent solar sectors.
