International Solar Alliance approves funding mechanism

International Solar Alliance approves funding mechanism

Subject : International Organisations

Context : To bolster investments in solar power projects, the International Solar Alliance (ISA), in its General Assembly approved the ‘Solar Facility’, a payment guarantee mechanism.

Concept :

About Solar Facility

• It is expected to stimulate investments into solar projects through two financial components:
• Solar Payment Guarantee Fund and
• Solar Insurance Fund
• The thrust of the facility is to attract private capital to flow into “underserved markets” in Africa.
• The ISA would aim to crowdsource investments from various donors across the globe and proposed projects in Africa would be able to purchase payment guarantees or partial insurance premium from these funds.

Why such move?

• ISA’s mission is to unlock US $1 trillion (₹80 lakh crore) of investments in solar power by 2030 while reducing cost of the technology and its financing.

International Solar Alliance (ISA)

• The ISA is an alliance of more than 121 countries, most of them being sunshine countries, which lie either completely or partly between the Tropic of Cancer and the Tropic of Capricorn.
• The initiative was launched by PM Modi and President of France at the 21st Conference of Parties (COP21)to the United Nations Framework Convention on Climate Change (UNFCCC) held in Paris in 2015.
• It is headquartered in Gurugram, India.
• The primary objective of the alliance is to work for efficient exploitation of solar energy to reduce dependence on fossil fuels.
• The alliance is a treaty-based inter-governmental organization.
• The United Nations General Assembly (UNGA) has granted Observer Status to the International Solar Alliance (ISA).

Structure of the organization:

• The International Solar Alliance is headed by the Director General.
• The Director General leads the operations and carries out the functions of the ISA Secretariat.
• He is responsible to the ISA Assembly.
• The Director General has a term of four years and is eligible for re-election.