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India to leverage ISA to project solar power expertise to small island nations

ISA has been working with the World Bank on SRMI model in Maldives, where the solar power tariffs have fallen by half. (Bloomberg)Premium
ISA has been working with the World Bank on SRMI model in Maldives, where the solar power tariffs have fallen by half. (Bloomberg)

  • ISA has become a significant foreign policy tool for New Delhi even as China attempts to co-opt countries into its ambitious One Belt One Road initiative
  • To counter Beijing, the US is also seeking a bigger role for India in stabilizing and maintaining the rule of law in the Indo-Pacific region

NEW DELHI : India plans to leverage International Solar Alliance (ISA) to help project its solar power expertise to small island countries, said two people aware of the development.

A case in point being Maldives where the solar power tariffs have fallen by half. India is helping the atoll nation to tide over economic woes caused by the pandemic that originated in Wuhan, after a period that saw the former leadership of the Maldives leaning towards China.

“As economic development is heavily driven by energy, a sustainable way to extract and use energy is critical, especially for Small Island Developing States “ said Dr. Hussain Rasheed Hassan, Maldives’ environment minister in an emailed response.

“It is also worthwhile to note that, without private sector investments, we will not be able to scale up our renewable energy installations rapidly," he added.

This comes in the backdrop of ISA inking a partnership agreement with state-run NTPC Ltd for developing solar projects in 47 of least developed and small island developing member countries.

Also, ISA has become a significant foreign policy tool for New Delhi even as China attempts to co-opt countries into its ambitious One Belt One Road initiative. To counter Beijing, the US is also seeking a bigger role for India in stabilizing and maintaining the rule of law in the Indo-Pacific region.

“Solar program in the Maldives is an excellent example of the Sustainable Renewable Risk Mitigation (SRMI) initiative," said Faris Hadad-Zervos, World Bank’s country director for Maldives, Nepal and Sri Lanka in an email to Mint.

Compared to India’s solar power tariffs that touched a record low of Rs2 per unit last week, Maldives solar power tariff averages around Rs6-8 per unit.

ISA, the first treaty-based international government organization headquartered in India, along with the World Bank has been working on SRMI in Maldives that extends guarantees and technical assistance. This has yielded results with one of the record low tariffs for an island country of 10.9 cents per kilowatt-hour (kWh) recorded for a 5-megawatts (MW) bid floated under the SRMI framework, that also evinced interest from Indian developers. During this bid, the solar tariff fell by a half from the previous low of 21 cents per unit for a 1.5 MW tender.

Enthused by the response, Maldives is now looking to float a tender of 21 MW capacity, of which 10 MW is for floating solar with the balance for solar rooftop projects. Give the success in Maldives, this model may be replicated in other small island member countries.

“We feel that lessons from Maldives could be extremely relevant to other island nations that intend to develop sustainable solar programmes. We have agreed to work with the International Solar Alliance to integrate lessons from the Maldives into the SRMI programme for the benefit of other island nations," Faris Hadad-Zervos added.

Bearing this in mind, a Maldives country session has been planned on Saturday during the ongoing third edition of global renewable energy investors’ meet and expo (RE-Invest). Ministers of Tonga, Seychelles, Sri Lanka, Mauritius and Maldives are expected to participate in the event.

Queries emailed to an ISA spokesperson on Friday night wasn’t immediately answered.

The Indian industry welcomed the move.

“It's a good opportunity for small and mid-sized Indian companies as they can leverage their expertise gained by operating in a huge market such as India," said Sanjeev Aggarwal, founder and MD, Amplus, a large rooftop solar power producer, that is owned by Malaysia’s state-run oil and gas company, Petroliam Nasional Bhd or Petronas.

India is also trying to build strong ties with Pacific Island countries and has offered to partner with 14 of them, including Papua New Guinea, Fiji, Tonga and Samoa.

NTPC on its part plans to help Sri Lanka, Gambia and Malawi develop solar power parks and is eyeing project management consultancy contracts in Sudan, Mozambique, Egypt, Uganda, Rwanda and Niger. It recently got such contracts in Mali and Togo.

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