After Guyana’s call for more funding, Solar Alliance raising millions for development needs
By Vishani Ragobeer in New Delhi
A new funding scheme meant to attract investors has been developed by the International Solar Alliance (ISA) to help vulnerable countries upgrade their energy infrastructure to use more solar energy as opposed to harmful fossil fuels like diesel.
This is according to ISA’s Chief Operating Officer, Josh Wycliffe who spoke to reporters in India, during an ongoing media familiarisation visit.
Wycliffe said the ISA is raising about US$250 million to support the energy transition in Africa first. Africa has been targeted for the first tranche of support since there is a dearth of financial support despite the existence of the greatest energy needs.
But that funding facility will be expanded to other vulnerable regions and countries like the Caribbean eventually, he added.
Importantly, this new facility was developed after Guyana’s President Dr. Irfaan Ali called for more funding to help Caribbean countries at an ISA regional meeting held in Guyana last August.
President Ali said Caribbean countries are keen on using more renewable energy sources, particularly solar energy since it is better for the environment but he lamented that the countries do not possess the much-needed funds to do so just yet.
“Since we had the meeting last time in Guyana, the team has come up and put together the basic model (for the funding scheme).
“…It has gone through changes since the last meeting in Guyana …(and) we should be able to launch later in the year as to how we can take this forward and pull it across to the Caribbean and the Asia/ Pacific (region),” Wycliffe said in response to questions posed by the News Room.
What exactly are the specifics of the funding scheme?
The funding secured is meant to attract private investments through two main components: a payment guarantee and an insurance support fund.
Through the payment guarantee, the ISA would be able to partially compensate investors.
The insurance premium is meant to offset the cost of insurance for a specified period, particularly in the pre-revenue phase. Wycliffe explained that if there is some loss based on a calamity or disaster, the insurance will help cover that.
With these two components, Wycliffe said the ISA believes that some “investors’ fears” will be allayed.
The ISA started as a joint effort of India and France at the sidelines of the 21st Conference of Parties (COP21) to the United Nations Framework Convention on Climate Change (UNFCCC) held in Paris in 2015. Since then, the body has been engaging international financial institutions in securing the capital needed by small and/or developing states to integrate more solar energy solutions.
Guyana has been engaging the ISA on solar projects, including the rollout of mini-grids across the country.