ISA approves setting up funds for solar project insurance
2 min read . Updated: 18 Oct 2022, 08:13 PM IST
Premium- The solar facility, a payment guarantee mechanism, is expected to stimulate high potential solar technologies, by attracting private capital to flow into underserved markets in Africa, while ensuring a payment and insurance mechanism as a first loss guarantee
NEW DELHI : The assembly of International Solar Alliance (ISA) approved the ‘Solar Facility’, a payment guarantee mechanism which is expected to stimulate investments into solar through two financial components -- Solar Payment Guarantee Fund and Solar Insurance Fund.
The solar facility is expected to stimulate high potential solar technologies, by attracting private capital to flow into underserved markets in Africa, while ensuring a payment and insurance mechanism as a first loss guarantee.
The ISA will soon operationalize Solar Facility to crowdsource investments from various donors across the globe and proposed projects in Africa will be able to purchase payment guarantees or partial insurance premium from these funds, said a statement.
“Now the only assistance which is required for those countries is not actually capital investment. Cpital investment will come. What will;l be necessary will be to put in place mechanisms for insurance of investment, mechanisms for payment security. The international solar alliance is floating two funds. One fund is for payment security, which means putting in place mechanism for payment security, becuase if you have payment security in place private investment will come," said ISA president and union minister for new and renewable energy RK Singh.
Speaking to reporter, he also said that that the alliance has drafted framework agreement for its ambitious ‘One Sun One World One Grid’ (OSOWOG).
Addressing the media at the fifth assembly of the International Solar Alliance (ISA), Singh said that the agreement would be open for signatures by member countries after approval by its steering committee.
“We set up technical group in the ministry of power and that technical group has experts on transmission. Now that technical group has been working. They have worked out feasibility of interconnections through different regions and and they have initiated this dialogue. Each of these regions have regional grids. So the idea is to connect these regional grid," he said.
“We have drawn up a draft framework agreement which will be open for signature after this steering committee approves it. So the work on one sun one world one grid is progressing," added Singh, who also holds the portfolio of new and renewable energy.
He said that the plan under the initiative is to connect regional grids across the world.
He further noted that it is the mission of ISA to assist member nations in formulating and implementing solar-ready policies and regulatory development of national energy landscapes and for engaging with public and private sector entities to leverage low cost financing to achieve ISA’s solarization agenda.
The assembly is the apex decision-making body of ISA, in which each member country is represented. This body makes decisions concerning the implementation of the ISA’s Framework Agreement and coordinated actions to be taken to achieve its objective. The assembly meets annually at the ministerial level at the ISA’s seat.
During the fifth assembly of the body on Tuesday, India and and France are re-elected as President and Co-President of the ISA. Union power and new & renewable energy minister R.K. Singh will be the president of ISA while Chrysoula Zacharopoulou, France’s Minister of State for Development, Francophonie and International Partnerships, will be co-president of the International Solar Alliance.
