According to reports, the International Solar Alliance (ISA) is proposing to set up a $300 billion fund to support clean energy projects in member countries over the next 10 years.
“The proposal is to strive for 300 billion dollar global fund over 10 year with contributions from the World Bank … and also from Green Climate Fund to leverage $3,000 billion investment from the corporate sector for meeting investment requirement for solar energy programmes and projects in ISA member countries for the next 10 years,” ISA interim Director General Upendra Tripathy told reporters here.
The ISA is an alliance of more than 120 countries.
The allocation will be notional and will only be backed with 20 per cent of the amount being budgeted. The risk guarantee premium may be 0.8 to 1 per cent and the World Bank may administer it as a commercial project, Tripathy said.
“We are thinking of creating over a period of 10 years 300 billion dollar fund. 300 billion dollar is a big number,” he said.
“The idea of ISA is not to ask for cheques not to tell them to deposit money. This…is the cheque of assurance, of commitment, that if somebody has taken the assurance and the claim comes then only you have to settle it…this will attract capital into this sector in the ratio of 1:10.”
ISA was launched in November 30, 2015, as a coalition of solar resource rich countries jointly by Indian Prime Minister Narendra Modi and French President Francois Hollande in the presence of the then UN Secretary General Ban Ki Moon on the first day of the Paris Climate Conference or CoP21.
“If we put one dollar in insurance 10 dollar will come by way of investment. If we put 300 billion dollar, 3000 billion dollar will come,” he said.
India is also examining allocating a line of credit of $1 billion for non-African ISA member countries.
It is on the lines of a $2 billion line of credit being operated by the Ministry of External Affairs in Africa for solar projects in countries that have signed and ratified the ISA treaty.
The ISA along with France and India is proposing to launch a programme for solar mini grids in the near future.
Indian firms have submitted expression of interest for setting up of mini grids equivalent to 78 mw in partnering African countries under India’s soft loan related schemes for the continent.
The ISA has also proposed setting up a mechanism to lower the risk involved in financing of solar projects.
“The ISA programme, ‘Affordable Finance at Scale’, launched in April 2016 offers as its action point to set the ground for establishment of Common Risk Mitigating Mechanism,” Tripathy said.