Context
To bolster investments in solar power projects, the International Solar Alliance (ISA), in its General Assembly approved the ‘Solar Facility’.
- ISA’s mission is to unlock US $1 trillion (?80 lakh crore) of investments in solar power by 2030 while reducing cost of the technology and its financing.
What is a Solar Facility?
- Solar Facility is a payment guarantee mechanism.
- It is expected to stimulate investments into solar projects through two financial components:
- Solar Payment Guarantee Fund
- 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.
Benefits of the project
- Attracting investment: An interconnected grid would help all the participating entities in attracting investments in renewable energy sources as well as utilizing skills, technology and finances.
- Poverty alleviation: Resulting economic benefits would positively impact poverty alleviation and support in mitigating water, sanitation, food and other socio-economic challenges.
- Reduced project cost: The proposed integration would lead to reduced project costs, higher efficiencies and increased asset utilization for all the participating entities.
What is the International Solar Alliance (ISA)?
- The ISA is an alliance of more than 121 countries, most of them being sunshine countries, which lie either completely or partly between the Tropic of Cancer and the Tropic of Capricorn.
- It is headquartered in Gurugram, India.
- The primary objective of the alliance is to work for efficient exploitation of solar energy to reduce dependence on fossil fuels.
- The alliance is a treaty-based inter-governmental organization.
- The initiative was launched by the PM at the India Africa Summit and a meeting of member countries ahead of the 2015 United Nations Climate Change Conference in Paris in November 2015.
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