The Role of International Solar Alliance in Advancing the Energy Transition in Asia

Authors’ Abstract

For the last three consecutive years, global investments in renewables-based electricity capacity have beaten fossil fuels. In India renewables have dominated power sector investments since 2015. Despite these trends and fall in technology prices, the bulk of clean energy investments bypass developing countries. Large potential for solar (and wind) in developing countries remains untapped, in large part because risk-averse investors are unwilling to deploy funds in what they view as challenging markets.

The International Solar Alliance (ISA) was announced in 2015 as a response, to bring solar-rich nations together and offer a larger market, in order to facilitate deployment of existing solar technology, reduce prices further, and promote collaborative solar R&D and capacity building. ISA has the potential to facilitate climate action in developing countries, particularly in Asia, if it can catalyse finance, technology and deployment of solar at scale.

This chapter explores two themes: (i) energy demand in Asia, and (ii) the premise and purpose of ISA. Building on these themes, it dives deep into a critical question for the energy transition: How could the cost of finance associated with investments in clean energy be lowered? The chapter outlines the design of an innovative financial solution—Common Risk Mitigation Mechanism (CRMM)—that incorporates three categories of risks (offtaker, currency, and political) through a single facility. A multi-risk and multi-country approach would help to reduce exposure for any single country, investor or project developer. The chapter concludes with specific recommendations for ISA to demonstrate its value proposition to member nations.

Post Description:

  • Publication year: 2021
  • Content type: Book chapter
  • Form of cooperation: Technical Assistance
  • Cooperation context: Multilateral co-coperation, multi-stakeholder
  • Sector: Energy
  • Institution: Springer
  • Author: Arunabha Ghosh and Kanika Chawla
  • Keywords: International Solar Alliance, Energy, Finance, Asia
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