The International Solar Alliance, championed by India and France, came into effect Wednesday, aiming to promote affordable sun-powered electricity to its members through global tenders and cheap financing.
The inter-governmental agency, which has been ratified by 19 countries and has 46 signatories to its framework agreement, aims to mobilize $1 trillion of low-cost financing for solar energy by 2030, Upendra Tripathy, interim director general of the alliance said in an interview in New Delhi.
“There is no shortage of capital as trillions of dollars are lying in big funds and our program seeks to help divert this into renewable energy,” Tripathy said, adding that the ISA is exploring green bonds for renewable energy projects and raising money in local currencies to remove hedging risks.
Headquartered in India, the alliance of countries clustered around the equator was first proposed by Indian Prime Minister Narendra Modi and former French President Francois Hollande in 2015 to ramp up the use of solar power to provide cheap access to electricity. The member countries include Australia, Bangladesh and Somalia.
The agency is expected to bring out its first global tender for supplying 300,000 solar-powered pumps mainly in India, Bangladesh and Mauritius in the next three months, Tripathy said. The number could increase if more countries express interest in procuring the pumps.
The ISA can help energy-poor countries get access to electricity in a faster and more affordable way, said Arunabha Ghosh, chief executive officer of policy researcher Council on Energy, Environment and Water.
“We can hold the ISA as an example of what effective multi-country platforms can look like,” Ghosh said, adding that it can lower the cost of finance by hedging risks across countries and pooling resources for research.