Solar Financing to Brighten Renewables
The International Solar Alliance (ISA) was launched as part of the COP21 held at the UN Climate Conference in Paris on November 30, 2015. Its main objectives were to reduce the cost of solar technology and cost of finance for these technologies, mobilize investments, and set up common mechanisms and instruments for massive deployment of solar energy. The panel discussion during the corporate conclave explored the topic, ‘Accessing Finance for International Solar Alliance Programmes with Focus on South East Asia, Africa, Island countries and India'.
Panelist Mr Jiwan Acharya, Senior Energy Specialist, Asian Development Bank (ADB) said in solar financing the question is always how much money and how many projects are available. He added that ADB has invested $29 billion in this field and is trying to raise more money. He also emphasized that solar power is a high priority for them and will continue to remain so. He said ADB will invest $6 billion in related projects.
However, Mr Drew Johnson, Chairman, CENERGIST Limited and BIG Solar UK, struck a more sombre note and said a lot of money has been spent on reducing the cost of existing solar technologies and the best option now is new technology capable of market disruption, with research and financial backing. His suggestions for solar financing included creating a special purpose vehicle such as a solar investment bank with a public–private ownership ratio of 50:50, corporate contribution from tax incentives, and academic research in the field.
Mr Manoj Kohli, Executive Chairman, SB Energy, too, said the cost of capital in solar plants is huge. He added that if $1 billion is to be spent on solar, as the Government of India wants, some conditions need to be met. These would be off-take guarantee, payment guarantee, and termination compensation. He pointed out that solar power projects are the ones where all the money is invested even before day zero of the plant running.
"Infrastructure funds should be fully supported by the government until a marketplace is created," he added.