ISA to Launch USD 100 Mn Global Solar Facility, Upscale Insurance Mechanism
The International Solar Alliance (ISA) is looking at developing a USD 100 million fund which it expects to attract USD 1.5 billion worth of solar projects across the least developed nations in Africa.
September 04, 2024. By EI News Network
ISA also plans to upscale the insurance mechanism and a partnership with the World Bank and the Multilateral Investment Guarantee Agency (MIGA) is on the cards. This insurance mechanism will aid poorer countries in getting funds for various RE projects.
ISA is expected to announce the nuances of these schemes at the inaugural edition of ISA’s International Solar Festival, scheduled to be held on September 5-6, 2024 in New Delhi.
Talking about the Global Solar Facility, Dr. Ajay Mathur, Director General of ISA said, “Global solar facility, the insurance mechanism, initially focuses on decentralised systems in Africa. We are looking at a Guarantee Fund of USD 100 mn that would hopefully lead to 15 times that funding. So, projects worth USD 1.5 billion could occur.”
He further informed that USD 39 million has already been committed and another USD 15 mn is expected to come in the next few days. “At USD 50 mn, which we are hoping to cross, we will operationalise the fund,” he added.
Detailing how this would work, Mathur divulged, “We will have a parent company as part of ISA. However, since the parent company is far removed from the geography, it will be difficult to know what projects are going to happen in Africa, from where the funding is going to come, and where the guarantee is required. To address this, we are in the process of selecting an African fund agency as our manager. So, they will get the money, the projects and they will see where this is required. The parent company will evaluate the proposals and make the decision.”
Mathur further shared that ISA will almost certainly announce the Investment manager for Africa during the ISA International Solar Festival.
He also mentioned that the ISA is exploring the use of an insurance mechanism, similar to the one implemented in the Nuru project in Congo. The ISA is in discussions with MIGA to upscale the facility that would provide insurance in the least developed countries in Africa, facilitating increased investment in the solar sector.
“On the same basis, we are getting into an agreement with the World Bank and MIGA to make this into a larger facility. An agreement between ISA and MIGA is on the cards. With the World Bank, we are talking about two things. We are talking about an operational relationship in which we work on a first-of-kind project where we will work on the technology, business models and regulations. And, when that is ready, the World Bank can set up a programme to upscale it,” informed Mathur.
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