GSF to Catalyze Solar Investments in Africa, Other Underserved Regions
In a major boost for the global transition to solar energy, the International Solar Alliance (ISA) today announced that its Global Solar Facility (GSF) will receive a capital contribution of $35 million. The GSF is a payment guarantee fund designed to catalyze solar investments in underserved segments and geographies across Africa.
The $35 million capital contribution will come from a variety of sources, including the Government of India ($25 million), the ISA ($10 million), Bloomberg Philanthropies, and the Climate Investment Funds (CIFF). The ISA said that the GSF is expressly designed to provide investors with the confidence to take up projects in Africa and to enable $10 billion in investments, which will further clean energy access in 35–40 million African households by 2030 and benefit around 200 million people in the region.
The ISA’s Director General, Dr. Ajay Mathur, welcomed the capital contribution, saying that it will help to address the “profound disparity” in global solar investment, which currently falls woefully short of the required amount for achieving net-zero emissions. He also noted that Sub-Saharan Africa’s per capita renewable energy investment has plummeted by 44% from 2015 to 2021, despite the region’s vast solar potential.
The GSF will provide investors with a variety of risk mitigation measures, including payment guarantees, insurance, and investment funds. It will also provide technical assistance to address regulatory gaps, reduce currency risks, and resolve contractual and financial uncertainties in the solar energy sector.
The ISA said that the GSF will initially focus on Africa, but it aims to expand to other regions in the future. The ISA has already signed Memoranda of Understanding with the Multi-Lateral Investment Guarantee Fund (MIGA), Africa 50, and the West African Development Bank (BOAD) to facilitate investments through the GSF in Africa.
The launch of the GSF is a significant milestone in the ISA’s mission to promote solar energy deployment around the world. The GSF is expected to play a major role in helping to achieve the ISA’s goal of mobilizing $1 trillion in solar investments by 2030.
R K Singh, Minister of Power and New & Renewable Energy, Government of India, and the President, International Solar Alliance Assembly said, “Global Solar Facility aims to leverage investments to accelerate transition to solar energy. The target for the GSF is to raise 100 million USD. 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. 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 a security of payments, which has enabled India to attract investments. In the years to come, we will look at globalising 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.”
Experts on renewable energy and climate change welcomed the launch of the GSF.
Antha Williams, who leads environment programs at Bloomberg Philanthropies, said: “African countries are positioned to be global leaders in solar power but lack the capital necessary to unlock their untapped potential. Bloomberg Philanthropies looks forward to continuing its partnership with the International Solar Alliance through the Global Solar Facility to help facilitate the widespread deployment of solar energy projects across the continent not only to help solidify the continent as a global leader on clean energy but also address the twin challenges of energy poverty and the climate crisis.”
Ms Kate Hampton, Chief Executive Officer of CIFF, said: “We are thrilled to announce CIFF’s commitment to seed funding the International Solar Alliance’s Global Solar Facility, which will unlock critical low-cost institutional and private sector investment for solar in ISA member countries. Here and in all our work, CIFF is resolute in its commitment to championing clean, affordable energy, to driving the global energy transition, and to securing a livable planet for children and young people around the world.”
The launch of the ISA’s Global Solar Facility is a positive development for the global transition to clean energy. The GSF is expected to play a major role in helping to unlock solar investments in Africa and other underserved regions. The GSF is a welcome addition to the growing toolkit of financial instruments available to support the deployment of solar energy around the world.