ISA Raises Viability Gap Funding for Solar Projects From 10% to 35%

The 6th Assembly of International Solar Alliance was held in Bharat Mandapam, New Delhi on 31st October. Addressing the event, Shri R. K. Singh, in his capacity as the president of ISA announced the organization’s decision to increase viability gap funding cap for solar projects.

Earlier, ISA provided a grant of $150,000 or 10% of the project cost (whichever is lower), per country per project. Now, the incentive has been raised from 10% to 35% of the project cost, depending on the capacity and needs of the countries and their respective projects.

The Union Minister stated that this move will promote the flow of investment in low-income countries of Africa.

In his address, Singh also highlighted the dependence of a staggering 80% of the population on fossil fuel imports. However, he also emphasized that renewable energy sources have the potential to supply 65% of the world’s electricity by 2030 and decarbonize 90% of the power sector by 2050.

“The International Solar Alliance is steadfast in its commitment to Member Countries to make solar as the energy source of choice, foster environments conducive to attracting investments, and ensure ample energy availability to meet the surging global demands” he states.

The assembly inaugurated four projects set up with ISA assistance:

• Solarisation of the parliament building of the Republic of Malawi
• Solarisation of two rural health care centres in the Republic of Fiji, with an 8-kW solar PV system and 20-kWh battery storage capacity for each health centre
• Installation of 1 solar-powered cold storage of capacity 5 MT for the benefit of agricultural stakeholders at La Digue Island, Republic of Seychelles
• Solarisation of the Nawai Junior Secondary School (JSS) in the Republic of Kiribati, with a 7 kW Solar PV rooftop system paired with a 24-kWh BSS

Moreover, R.K Singh also spoke about the capacity-building initiatives of the ISA. Training centres have been set up across Africa to provide expertise and support about solar technologies.

Such projects have aimed to showcase solar applications that can be scaled up and build the capacity of beneficiary member countries.

The minister highlighted how the International Solar Alliance has emerged as a ‘force for good in the world’ which is helping in achieving the twin goal of energy access and energy transition.

“ISA is facilitating over 9.5 GW of solar applications in 55 developing countries, including LDCs and SIDS, and have already provided training to nearly 4000 people across the developing world on ways to make a living out of supporting solar energy. We are working on developing STAR Centres in countries which will be a hub of technology, knowledge, and expertise on solar energy. In addition, ISA is enabling solar mini grids to provide universal energy access, especially where grid extension is too expensive…” said Dr Ajay Mathur Director General of International Solar Alliance

Dr. Mathur also revealed that ISA has developed a mechanism to provide guarantees through its Global Solar facility to countries in Africa. This measure will help bring in private sector investment. Along with this, ISA is helping entrepreneurs in becoming major suppliers of solar energy across regions.

The assembly discussed how the successful energy transition practices adopted by India can be replicated in developing nations. Minister R.K Singh stated that public investment alone cannot facilitate universal access to electricity.

This is why, it is crucial to de-risk investment in solar so that private investments can flow in. Discussing the policies and framework adopted in India, such as dispute settlement mechanisms and payment security mechanisms, the minister explained that such measures can attract private investments in other nations as well.

Moreover, ISA has also set up a fund with components for insurance and payment security mechanisms towards this pursuit.

He also emphasized the importance of green funds, allocated by developed countries as per their COP21 commitments. “We also expect that green finance to become available with the funds we are setting up. As the green funds start flowing as per the commitments made by developed countries at COP21, we will have renewable energy projects being rolled out at scale throughout those countries where there is the problem of energy access” he explains

The assembly of the International Solar Alliance is an apex decision-making body, in which each of the 116 member countries are represented. The assembly meets every year at ISA’s seat to measure the effect of its solar programs in terms of performance, reliability, cost, scale of finance, etc.

The 6th Assembly of ISA, which began on 30th October will continue till 2nd November 2023.

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Resource: Press Information Bureau, GOI

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