In an email interview with Mint, ISA interim director general Upendra Tripathy spoke about building global consensus, the US withdrawal from the Paris climate agreement undermining its universality and mobilising finance for solar projects. Tripathy, a former Indian Administrative Service officer from the Karnataka cadre, also spoke about trying to persuade multilateral funding bodies earmarking at least 15% of their lending corpus for solar energy projects. Edited excerpts.
How has the journey been for ISA?
The journey has been fantastic. From inception up till today, we have garnered support from all the stakeholders—governments, multilateral financial institutions, R&D (research and development) institutions and corporates. We have 14 joint declaration partners as on date and seven corporate partners. We have launched four programmes. Each programme is joined by different ISA member countries... From time to time, we engage the national focal points (NFP) of ISA during NFP conclaves to help us prepare the solar road maps for their respective countries. Two NFP conclaves have already happened and we got a fairly good response. The key focus areas of ISA currently are to raise investment, bring bankable projects in the ISA member countries and Solar Technology and Application Resource Centre (I-STARC)... All this reflects a build-up of consensus at a global level among all the stakeholders to make solar affordable by realising economies of scale. This, according to me, is the biggest achievement.
What are the big deliverables for the general assembly planned in October?
This is going to be the first assembly of ISA. Rules and regulations have to be adopted, programme activities will be finalised by the participating countries, ISA manual will be placed for consideration and approval. As provided in Article IV(1) of the ISA framework agreement, the assembly will take decisions concerning the implementation of the framework agreement and coordinated actions to be taken to achieve its objective. As per Article IV(2), breakout sessions of the assembly will be held in order to take stock of programmes at the ministerial level and will make decisions regarding their further implementation. As per article IV(3), the assembly will assess the aggregate effect of the programmes and other activities under ISA, in particular, in terms of deployment of solar energy, performance, reliability, as well as cost and scale of finance. Based on this assessment, members will take all necessary decisions regarding the further implementation of the objective of ISA.
Will US’s withdrawal from the Paris climate agreement impact global efforts to combat climate change through initiatives such as ISA?
The foundation of global climate governance and the process of climate cooperation are quite strong. The said withdrawal does undermine the universality of the Paris Agreement, but does not impair states’ confidence in climate cooperation. Any refusal to contribute to climate aid makes it more difficult for developing countries to mitigate and adapt to climate change. Cutting climate research funding will compromise the quality of future IPCC (Intergovernmental Panel on Climate Change) reports and ultimately undermine the scientific authority of future climate negotiations. The international community has resumed global climate leadership after the US withdrew its support. ISA will facilitate the rebuilding of shared climate leadership, while keeping the US engaged in climate cooperation.
Apart from the 65 countries that are signatories to the framework agreement, which are the other countries that are planning to join the alliance?
ISA has 121 prospective member countries, situated between the Tropic of Cancer and Tropic of Capricorn. Out of these, 65 countries have signed the ISA framework agreement and 35 have ratified it too. But, we keep getting requests from several countries outside the Tropics to become full-fledged members. This is a call for the assembly to take, and for this, ISA membership provisions in the framework agreement will have to be amended to enable any UN member across the globe to join.
Do you see a possibility of Pakistan and China joining the ISA and has an attempt been made for the same?
We are open to all the countries that fall between the Tropics of Cancer and Capricorn. They are more than welcome. We have been in touch with China and they have taken a lot of interest in ISA. Above all, we need China as well as other major countries to achieve the target of more than 1,000 GW by 2030. Pakistan can become a partner country even now.
What is the progress on plans to mobilise more than $1 trillion of investments needed by 2030?
To help mobilise more than $1 trillion, ISA has joint declarations with various multilateral banks like World Bank, European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD), Asian Development Bank (ADB), African Development Bank (AfDB), New Development Bank (NDB), Asian Infrastructure Investment Bank (AIIB), and Green Climate Fund (GCF). Also, ISA is in the process of facilitating a Common Risk Mitigation Mechanism (CRMM) and mitigation fund to insure projects against risks such as payment defaults from electricity procurers, foreign exchange fluctuations or political risks. A preliminary study about the same was unveiled during COP 23 last year. So, we need to work in tandem with stakeholders, including pension funds, sovereign wealth funds, family funds, investment advisers, developers, associations, regulatory authorities, brokerage houses, asset managers and investment bankers, to spur investments across the supply chain.
The “Affordable Finance at Scale" programme of ISA was introduced to look at innovative financial mechanisms and credit enhancement mechanisms intended to increase the risk-free funds for large-scale solar energy deployment. The World Bank, EIB, TeraWatt Initiative, CEEW, CII and TCX are some of our partner stakeholders who are helping us currently to come out with concrete projects. We are requesting countries like Australia, the Netherlands, and the UK to put finance like France and India. France has earmarked one billion euros and India has earmarked two billion euros for solar projects.
Is there any collaboration in the works between ISA and Organization of the Petroleum Exporting Countries (Opec) and International Energy Agency (IEA)?
ISA has joint declaration with IEA and we have decided to work jointly in areas with a focus on action. We have a similar tie-up with the International Renewable Energy Agency also.
Has ISA’s wish of multilateral funding bodies earmarking at least 15% of their lending corpus for solar energy projects for the next five years gained any traction? If yes, please name the organisations that have agreed to it and the corpus earmarked for it.
We are still in the process of persuading the banks. We are in the process of developing a two-year action plan with all the financial partners with whom ISA has joint declarations. World Bank has earmarked around 28% of its loan portfolio for renewables. NDB has taken major strides and has even raised bonds in local currency in some countries to finance solar projects. We are hopeful of persuading all our financial partners to reach the target of 15%. The challenge indeed is to get bankable projects from bankable entities.