Modi Govt Considering $25 Mn Investment As Capital Contribution To Global Solar Facility
The union government is considering a USD 25 million investment as a capital contribution to the Global Solar Facility (GSF) in addition to USD 10 million coming from the International Solar Alliance (ISA).
The ISA on Tuesday said that the GSF, a payment guarantee fund formed by ISA to stimulate investments into solar power projects, is set to receive a capital contribution of USD 35 million.
Union Power and New & Renewable Energy Minister and ISA President, RK Singh said that the target for the GSF is to raise USD 100 million and that the aim going forward would be to globalize the GSF.
“Global Solar Facility aims to leverage investments to accelerate the transition to solar energy. Africa has immense potential in deploying solar energy capacities, yet due to risks in investments, the region has not been able to leverage its potential," he asserted.
The minister stated that the GSF aims to address this challenge and provide security to investments. India is a good example of development due to private sector investments. It has no sovereign risks and has a strong legal and security framework with a dispute mechanism and security of payments, which has enabled India to attract investments.
"In the years to come, we will look at globalizing the GSF. I invite all the Member Countries and organisations to partner with us in making this Facility a catalyst for the transformative change that we all are working towards," Singh added.
Ajay Mathur, Director General, ISA said that the GSF has been working towards crowdsourcing investments from various international donors. "We are delighted to have the support of the government of India, CIFF and Bloomberg Philanthropies," he added.
Mathur mentioned that this will enhance the confidence of investors to invest in decentralised solar applications in Africa and enhance the certainty of receiving returns on their investments and could lead to a sea change in global investment patterns.
The ISA highlighted that the GSF is expressly designed to provide investors with the confidence to take up projects in Africa and to enable USD 10 billion in investments, which will facilitate clean energy access in 35 to 40 million African households by 2030 and benefit around 200 million people in the region.
Mathur said, “The world requires an investment of $12.5 trillion in renewable energy and USD 23 billion in off-grid solar by 2030. The ISA through its Global Solar Facility is stepping up as current global solar investment falls woefully short, constituting only 10 per cent of the required amount for achieving net-zero emissions."
Additionally, there is a profound disparity in investments- with developing countries, home to over 50 per cent of the global population, receiving just 15 per cent of 2022's renewable energy investments. Sub-Saharan Africa's per capita renewable energy investment has plummeted by 44 per cent from 2015 to 2021, Mathur mentioned.
