The International Solar Alliance (IAS), which became a treaty-based global entity on Wednesday, will develop an insurance scheme – Common Risk Mitigating Mechanism – to protect investors’ interests so that more and more investment can be attracted to the growing solar energy sector.
The Alliance has set up an international expert group to work on blue print of the mechanism which is expected to be rolled out by December next year.
It is expected that the mechanism will help diversify and pool risks to unlock huge investment in the sector which may need more than $ 1 billion to create solar energy capacity of 1,000 GW globally by 2030.
Speaking about the move, the interim director general of the ISA, Upendra Tripathy, said, “We are planning to create risk mitigation mechanism which is a sort of insurance scheme so that more and more money can come to the solar sector”.
On how the ISA would mobilise huge investment in the sector, Tripathy told TOI that the Alliance would persuade the partner multilateral banks to earmark at least 10% of their credit to the solar sector. “We can always facilitate and create an ecosystem so that the money will flow in”, he said.
The ISA was jointly launched by India and France on sidelines of the UN climate change conference in Paris on November 30, 2015. Its goal is to facilitate creation of large-scale solar energy capacity in 121 prospective member countries by aggregating demand for funding, technology and innovation.
So far, 46 countries have signed the framework agreement of the ISA and 19 of them, including India, France, Australia, Bangladesh and Peru, have ratified it.
The ISA is the first inter-governmental global organisation which will permanently be headquartered in India. Its secretariat is located in the campus of the National Institute of Solar Energy, Gurugram, Haryana. India will meet the expenses of the secretariat for initial five years.