New Delhi: The International Solar Alliance (ISA), an India-driven alliance of countries that focuses on expanding the adoption of renewable energy in the underdeveloped world, plans to create a global bank that can exclusively fund such projects. It will be be built along the lines of newer multilateral funding agencies like AIIB (Asian Infrastructure Investment Bank) but will involve private participation as well, an official with the ISA said.

"There is no other bank today that will focus exclusively on renewables," Upendra Tripathy, Interim Director General, ISA, said at a conference organised by the Centre for Science and Environment. "You need financial and risk mitigation mechanisms (to spread the adoption of renewables). At present, there are 1.2 billion people in the world without access to electricity and by 2040, there will still be 600 million people will still be without access, according to World Bank estimates."

"We've asked the Asian Development Bank to prepare a concept note on creating a bank within ISA that can fund renewable projects," Tripathy said. "It should be a global solar bank and structurally, the ownership should be both public and private. We're planning to take this proposal to the next assembly in September this year."

Plans are still in the ideation stage, Tripathy said, and formal discussions will begin depending on the response to the concept note, on whether this is feasible or desirable. ISA is 71-member strong today. "We want sovereigns to contribute 50% of the capital and will work as a base to allow private capital to come in and fund the rest."

The bank will have in-built financial mechanisms that will allow it to fund its own projects and are insured against all kinds of risk, be it institutional, offtaker or customer risks, he said. "The first priority of the bank will be energy access, second will be clean cooking fuel. There are billions of people in this potential market and someone has to make energy affordable and clean for them. Most countries joining ISA need access to institutional finance and that needs a dedicated bank with experts to make it happen."

However, Tripathy did not indicate what capital this bank — the World Solar Bank of ISA, as he has named the idea — will start with.

ISA was formed in 2018, at the initiation of India and France, to bring together cooperation on solar energy. During the founding conference, Prime Minister Narendra Modi had announced India's commitment to extend nearly $1.4 billion worth of lines of credit to cover 27 projects in 15 countries, especially in Africa.