International Solar Alliance to increase viability gap funding for solar projects to 35% from 10%

The ISA is an international organisation with 116 members and signatory countries.

The Sixth Assembly of the International Solar Alliance (ISA), hosted in New Delhi on October 31, decided to increase the viability gap funding (VGF) for solar projects across its member countries to 35 percent from the existing 10 percent. These projects will mostly focus on the underdeveloped and developing nations of Africa and South America.

“The ISA is steadfast in its commitment to member countries to make solar the energy source of choice, foster environments conducive to attracting investments, and ensure ample energy availability to meet the surging global demands.

Towards this, ISA, through its VGF mechanism, provides a grant of $150,000, or 10 percent of the project cost (whichever is lower), per country per project. The Assembly has now decided to increase the range to 35 percent of the project cost, depending on the capacity and needs of the countries and their respective projects,” said RK Singh, Union Minister for Power and New and Renewable Energy, who is also the President of the ISA Assembly.

The ISA, on October 31, also announced that the government of India is considering an investment of $25 million in the Alliance's Global Solar Facility (GSF), which is a fund that aims to accelerate renewable projects across the needy member countries. Moneycontrol was the first to report this on September 12. Besides, ISA on its own has pledged $10 million, taking the current total contribution to the GSF to $35 million.

The ISA is an international organisation with 116 members and signatory countries. It works with governments to ease solar deployment and promote solar power as a sustainable transition to a carbon-neutral future. ISA’s mission is to unlock $1 trillion of investments in solar by 2030 while reducing technology and financing costs. It promotes the use of solar energy in the agriculture, health, transport, and power generation sectors.

Around 80 percent of the global population resides in countries that depend on fossil fuel imports, totalling a staggering six billion people. According to the ISA, renewable energy sources have the potential to supply 65 percent of the world’s total electricity needs by 2030 and decarbonise 90 percent of the power sector by 2050.

The Co-President of the Assembly, Chrysoula Zacharopoulou, France’s minister of state for development and international partnerships, said, “For France, the ISA is a key initiative to promote the development of clean energy and thus combat climate disruptions. It is playing its full part in this great project, with constant and growing support for our alliance. Through the French Development Agency, we have financed over 1.5 billion euros worth of solar projects since 2016,” she said.

Ajay Mathur, Director General, ISA, said, "We urgently need to accelerate the build-up of solar energy, especially in developing countries and in applications that influence the daily lives of those without access to reliable energy – such as getting electricity from solar mini-grids, powering agricultural pumps, running cold storage systems, etc. Capacity building and regulatory change are necessary enablers towards that.”

ISA is facilitating over 9.5 GW of solar applications in 55 developing countries, including Least Developed Countries (LDCs) and Small Island Developing States (SIDS).

On October 31, four projects set up with ISA’s assistance were inaugurated by RK Singh. These include solarisation of the parliament building of the Republic of Malawi; solarisation of two rural health care centres in the Republic of Fiji, with an 8kW solar PV system and 20kWh battery storage capacity for each health centre; installation of one solar-powered cold storage of capacity 5 MT for the benefit of its agricultural stakeholders at La Digue Island, Republic of Seychelles; and solarisation of the Nawai Junior Secondary School (JSS) in the Republic of Kiribati, with a 7kW solar PV rooftop system paired with a 24kWh battery storage system.