Leading voices of the International Solar Alliance (ISA) have gathered with the Terrawatt Initiative (TI) to create a new taskforce designed to promote and attract investments in solar energy.
The Common Risk Mitigation Mechanism (CRMM) will draw upon the support of both the ISA, the TI and the World Bank Group, the Currency Exchange Fund (TCX) and the Council on Energy, Environment and Water (CEEW).
Its aim is to become a decisive instrument in rapidly scaling global solar spending to $1 trillion in countries located totally or partially between the tropics, by 2030. The CRMM will, therefore, form a major part of ISA nations’ COP21 pledges made in Paris in 2015.
The cost of capital remains a major burden for solar power development in many emerging economies, the TI says. In India, the CEEW estimates that raising finance represents up to 70% of the total cost of developing a solar plant, and the hope is that the CRMM can lower these costs and make it easier for developers and governments to attract the right type of investment.
To do so, the TI says that it will work with the ISA to “create a secure environment for private institutional investments in solar assets”, by pooling risks on mutualized public resources and ensuring collective buy-in and validation of funds from both public and private entities.
TI’s chairperson, Isabelle Kocher, called the initiative a “brilliant illustration of the innovation needed in public-private cooperation” to support the scale-up of solar energy. “It is a concrete and actionable response to climate change,” Kocher added.
Conclusions derived from the taskforce will be presented at COP23, to be held in Bonn, Germany, in November this year.