The FINANCIAL -- The World Bank and Agence Française de Développement are developing a joint Global Solar Risk Mitigation Initiative, an integrated approach to tackle policy, technical and financial issues associated with scaling up solar energy deployment, especially in some of the world’s poorest countries.
Initiated in Delhi at the first International Solar Alliance summit in March 2018, the initiative will support the ISA’s goal to reduce costs and mobilize $1,000 billion in public and private investments to finance 1,000 GW of global solar capacity by 2030.
As the costs for solar power have fallen steadily, solar power is increasingly viewed as a key component in the fight against climate change. However, solar deployment has been slow in some emerging markets, particularly Africa, due to layers of risks perceived by the private sector in financing solar projects. The SRMI aims to change that.
The SRMI’s integrated approach will include:
Support for the development of an enabling policy environment in targeted countries;
A new digital procurement (e-tendering) platform to facilitate and streamline solar auctions;
Targeting relatively small (under 20 MW) solar projects, offering a more comprehensive risk mitigation package of support to a wider range of investors and financiers to promote scale up at later stages. The financial risk mitigation package offered by SRMI will be supported by technical assistance and concerted engagement on planning, resource mapping and power sector reforms to ensure the creditworthiness of utilities in these countries;
Mitigating the residual project’s risks through adequate risk mitigation financial instruments for both on and off-grid projects.
The governments of India and France launched the ISA, an international organization as part of the Paris Climate Agreement in 2015 to scale up solar energy resources, reduce the cost of financing for solar projects around the world and ultimately help reach the Sustainable Development Goal on energy of providing access to affordable, reliable, sustainable and modern energy to all. To date, 71 countries have signed the constituting treaty of the ISA, and 48 have ratified it.