ISA to Launch $100 Million Solar Facility and Insurance Mechanism to Boost Solar Projects in Africa.

The International Solar Alliance (ISA) is set to launch a $100 million Global Solar Facility aimed at driving up to $1.5 billion in funding to expand decentralized solar power capacities across Africa's least developed countries, where over 700 million people currently lack access to electricity.

In addition to this significant fund, the ISA is developing an insurance mechanism designed to accelerate investment in solar projects in impoverished nations. Both initiatives are expected to be officially announced at the ISA’s first international solar festival, taking place this Thursday and Friday in New Delhi.

ISA Director General Ajay Mathur highlighted the organization's mission to unlock the full potential of solar energy by fostering partnerships among businesses, academic institutions, youth, women, and communities. This collaborative framework is intended to drive substantial investments and pave the way for a sustainable and vibrant future powered by solar energy.

The solar festival aims to catalyze global solar adoption by forming strategic partnerships, introducing innovative financing models, deploying advanced technologies, and enhancing capacity in ISA member countries. By aligning the efforts of businesses, policymakers, and financial institutions, the festival will serve as a platform for collaborations that will fast-track the transition to affordable, reliable, and sustainable solar energy worldwide.

ISA, originally conceived as a joint initiative by India and France to combat climate change through solar power deployment, is focusing the Global Solar Facility on decentralized solar systems in Africa. Mathur explained that the $100 million guarantee fund is expected to leverage approximately 15 times its value, potentially leading to $1.5 billion in projects. Currently, $39 million has been committed to the fund, with an additional $15 million anticipated soon. The fund will be operationalized once the $50 million threshold is crossed.

Discussing the fund's operational dynamics, Mathur noted that an African fund agency will be selected as the investment manager, responsible for managing the funds and identifying project opportunities. The parent company, part of ISA, will oversee the process and make final decisions on the allocation of resources. The investment manager for Africa is expected to be announced at the festival.

The ISA is also working on applying the insurance mechanism to the Nuru project in Congo. In collaboration with the Multilateral Investment Guarantee Agency (MIGA) of the World Bank, ISA aims to create insurance facilities that will enable greater financial flows into the solar sector in Africa's least developed countries.

Last year, MIGA issued a $50.3 million guarantee to Congo Energy Solutions (CESL) for its investments in Nuru SASU of Congo, a project involving hybrid solar mini-grids. This guarantee protects CESL against risks such as expropriation, transfer restrictions, and war & civil disturbance for 15 years. ISA is now working on an agreement with MIGA and the World Bank to expand this insurance mechanism into a larger facility that will support similar solar projects across Africa.

HBL