International Solar Alliance Increases Viability Gap Funding for Renewable Projects to 35 Percent

The International Solar Alliance (ISA) has decided to increase the viability gap funding for renewable projects to 35%, its President R K Singh announced on Tuesday. This move is expected to increase the investment flow into Africa, where around 733 million people still don't have access to electricity.

Promoting Renewable Energy and Access to Electricity

Under its Viability Gap Funding (VGF) mechanism, ISA provides 10% or USD 150,000 (whichever is lower) of the project cost to member nations for identified renewable energy projects. The decision to increase the VGF from 10% to 35% was made during the sixth session of the ISA Assembly, with the aim of enabling more investments to flow into Africa's solar industry.

Singh, who also serves as India's Minister for New and Renewable Energy, emphasized the potential of solar energy in providing sustainable access to electricity for those who currently lack it. He highlighted the steps taken by India in terms of regulatory mechanisms and techno-regulatory frameworks to attract investments into the country's renewable energy sector, and expressed the willingness to share these experiences with other ISA member countries.

De-risking Investments and Supporting Solar Projects

To further support the development of renewable energy projects in developing countries, ISA has established a fund that includes components such as an insurance component and a payment security mechanism component. This fund aims to de-risk investments and secure both the project and payments.

Chrysoula Zacharopoulou, Co-President of the Assembly and France's Minister of State for Development, Francophonie, and International Partnerships, emphasized the importance of ISA as a key initiative in promoting clean energy development and combating climate disruptions. She highlighted France's commitment to the alliance and its support for solar projects through the French Development Agency (AFD), which has financed over 1.5 billion euros worth of solar projects since 2016.

Accelerating Solar Energy Adoption

Ajay Mathur, Director General of the International Solar Alliance, drew attention to the significant investment in the solar industry globally, with USD 380 billion invested this year. However, he noted that only 3% of these investments were directed towards Africa. To address this disparity, Mathur emphasized the urgent need to accelerate the build-up of solar energy, particularly in developing countries and in applications that directly impact the lives of those without access to reliable energy.

ISA is facilitating over 9.5 GW of solar applications in 55 developing countries, including least developed countries (LDCs) and small island developing states (SIDs). The alliance has also provided training to nearly 4,000 people across the developing world on ways to make a living from supporting solar energy.

Inauguration of Solar Projects

During the Assembly, Singh inaugurated four projects undertaken by ISA. These included the solarization of the parliament building of the Republic of Malawi, the solarization of two rural health care centers in the Republic of Fiji, the installation of a solar-powered cold storage facility in the Republic of Seychelles, and the solarization of a junior secondary school in the Republic of Kiribati.

The International Solar Alliance's decision to increase the viability gap funding to 35% is a significant step towards promoting renewable energy projects and facilitating access to electricity in developing countries, particularly in Africa. By providing financial support, de-risking investments, and implementing solar projects, ISA is working towards its mission of ensuring that everyone has access to clean and sustainable energy.