The International Solar Alliance (ISA) has announced that the Global Solar Facility (GSF), a payment guarantee fund established by the ISA to stimulate investments in solar power projects, will receive a capital contribution of $35 million.
The GSF is designed to catalyze solar investments in underserved segments and geographies across Africa, unlocking commercial capital in the process. Last year, the ISA Assembly approved the GSF, which is expected to attract private capital to flow into off-grid solar projects, rooftop solar projects, and productive use solar projects.
This financing vehicle, bolstered by payment guarantees, insurance, and investment funds, aims to mitigate project risks, provide technical assistance to address regulatory gaps, reduce currency risks, and resolve contractual and financial uncertainties in the solar energy sector.
The Government of India is considering a $25 million investment as capital contribution in the GSF, in addition to $10 million coming from the ISA. Bloomberg Philanthropies and CIFF have also committed their support to the GSF. Union Minister for Power and New & Renewable Energy, Government of India, and President, International Solar Alliance Assembly, Shri R K Singh, said that the target for the GSF is to raise 100 million USD and that the aim going forward would be to globalize the GSF.
Director General of the International Solar Alliance, Dr Ajay Mathur, 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 facilitate clean energy access in 35-40 million African households by 2030 and benefit around 200 million people in the region. The ISA highlighted the need for diversifying investments in solar energy in Africa for mitigating climate change and a balanced energy transition.
After Africa, the GSF aims to expand to regions such as Asia, Latin America, and the Middle East, where the Regional Facilities will be tailored to meet specific requirements. In the future, GSF plans to invest in innovative technologies to enhance solar energy efficiency, support startups for faster solar energy implementation, and explore emerging solar energy sectors.
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