pv magazine: In terms of energy access, what are the most pressing concerns for ISA member countries, and how do these vary from nation to nation?
Upendra Tripathy: Unavailability of power and costly grid power are the two most pressing concerns for ISA member countries, though the narrative behind the key energy issues is more or less the same. Each country faces a set of its own unique challenges. From political will [and] current energy policy, to strength of the government in supporting … payment security mechanisms, to ensure bankability of [projects], everything matters. The risk perception amongst … investors differs on these parameters, and this impacts their interest [in participating] in projects in different countries.
We are trying our best in every way. In fact, I recently met HE [His Eminence] Ismaïl Omar Guelleh, president of the Republic of Djibouti, and HE Yonis Ali Guedi, minister of energy in charge of natural resources, to discuss expansion of [a] 150 kW solar power plant in order to provide energy access for households in the remote village of As Eyla.
How is the ISA addressing the finance challenge?
The ISA is working to bring bankable projects [to] member countries. For instance, [the] Affordable Finance at Scale program is built around a unique financial instrument that is being developed with the objective of de-risking and reducing the financial cost of solar projects in … ISA member countries. The instrument will help diversify and pool risks on mutual public resources, and unlock significant investments.
The Council on Energy, Environment and Water, [training and examinations institute, the] TWI, [the] Confederation of Indian Industry and [the] Currency Exchange Fund released findings of their feasibility study during COP23 in Bonn, Germany.
At the founding conference of the ISA, in March 2018, the World Bank Group [WBG] and other development institutions like Agence Française de Développement [AFD], announced that they will hold consultations with various stakeholders – including multilateral banks, financial and insurance institutions – to identify the needs of the stakeholders in terms of de-risking instruments. We look forward to the report of this de-risking market by WBG and AFD during the COP24 in Katowice.
The objective is to launch capitalization of the new facility in 2019, enabling a platform to offer enhanced risk coverage to solar projects, and leverage commercial capital for developing solar resources across borders.
Working on collective regulatory obligations remains central to the ISA’s strategy to solve the problem of energy access by [the] massive deployment of solar energy. In Lomé in August, an initial group of six pilot countries – Benin, Burkina Faso, Gabon, Mali, Niger and Togo – launched an initiative to accelerate the implementation of optimal collective regulatory obligations that will facilitate aggregation and [the] processing of funding requirements. This initiative is an answer to the official statement for the establishment of a regulatory framework, made during the International Solar Alliance summit on March 11, to leverage investments in projects that promote solar energy.
The objective of the Lomé initiative is to establish, with the support of legal experts, a regulatory and contractual framework that shall create a collective, simplified and accelerated procedure to [procure and finance] solar projects, thus reducing … transaction and financing costs.
It is always mentioned that the successful implementation of ISA programs would require capacity building across domains on a very large scale. How is the ISA planning to address this?
The ISA’s iSTAR-C [Solar Technology Application and Resource-Center] project aims at building a network of technical training and research centers in order to promote knowledge dissemination and capacity building with regards to solar energy and infrastructure projects. The ISA appreciates the strong support [for] the implementation of this project provided by the French National Institute for Solar Energy, the AFD and the National Institute of Solar Energy India [plus] the Bureau of Indian Standards and foundations.
iSTAR-C was selected as an outstanding project among 900 projects assessed during the Paris Peace Forum in November in Paris.
iSTAR-C centers include both Centers of Excellence dedicated to R&D and innovation [and] technical centers that will provide technical and vocational training tailored to the specific needs of each country. Then there are going to be Global Centers of Excellence for top-notch expertise.
The aim is to provide each ISA participating country with direct access to an iSTAR-C at national or regional levels. The ISA, in partnership with member countries and partners, is setting the stage for a comprehensive reflection on the standardization and … development of benchmark criteria for the activities provided by iSTAR-C.[The] ISA has launched a survey [of the] solar energy needs of member states and prospective members. Preliminary results show that participating states are mostly interested in short to medium term training – to be implemented in the next six to 12 months – for all stakeholders [including] solar technicians, solar engineers, trainers, policymakers and investors. Specific needs have been mentioned with regards to the drafting of solar projects and solar entrepreneurship.
The ISA is currently in the process of fine-tuning the needs assessments of a first group of interested participating states. Besides this, the East African Centre of Excellence for Renewable Energy and Efficiency has identified gaps in rural electrification, as well as quality issues and insufficient technical capacity, that hinder the development of solar PV systems in east Africa. So the work is on … many fronts.
Talking of member countries, what can they all bring to the table as givers – solution providers – and takers?
Certain countries, because of historical reasons, are rich in capital and experience. Then there are countries with a huge market potential for solar energy, on account of [the] unavailability of energy or the need to reduce the price of power. Many countries, like India, have developed the rich experience in bringing down the cost of solar power through auctions. The cost of power from utility-scale solar plants has come down from [more than] 10 cents in 2013 to less than 4 cents now, in India.
Bangladesh has been doing excellent work in providing solar energy solutions for water pumping systems. Also, Africa is harnessing [a] ‘pay as you go’ model. Such practices can be replicated in other countries.
Thus, the ISA intends to leverage a lot of synergy between … diverse members to together make the sun shine brighter.
The first assembly of the ISA was held in October in India. What were the major takeaways?
The first assembly of the ISA deliberated on a comprehensive agenda. The most scintillating takeaway and historic decision was to expand the scope of ISA membership beyond the tropics.
Also, to ensure an equitable geographical representation from the ISA members, the invitation was extended to the assembly to appoint four vice presidents to assist the president and the co-president in conducting the proceedings of … meetings. The four geographical regional groups of … ISA members will be Africa; Asia Pacific; Latin America; and Caribbean, Europe and others.[The] ISA thrives on its rich partner base, and we did see expansion on that front as well, during the course of business proceedings of the assembly. Power Finance Corporation, Coal India and [the] India Trade Promotion Organisation contributed towards the corpus fund. The ISA also institutionalized the Kalpana Chawla Award, for solar scientists, in collaboration with the government of Haryana.
What are the ISA’s goals for the coming year?
Implementing the work plan that is now approved by the assembly is the first and the foremost goal of the ISA for this coming year.
Among other important options, one is to create the Solar Risk Guarantee Facility, or SRGF, a platform to offer enhanced risk coverage to solar projects in different countries. This would be a unique opportunity to de-risk projects across multiple WBG organizations and instruments, and [would] leverage commercial capital for developing solar resources across borders.[The] ISA would also be working on creating a Solar Platform, which would be a parallel platform to develop [an] e-tendering instrument [in line] with the WBG procurement and environmental and social guidelines, and standardized due diligence process. The underlying objective will be to contribute to the implementation of an enabling environment for countries that will choose to rely on these structures, benefiting from the aggregation and/or standardization approaches.
The WBG and AFD will play a significant role in [making] the guarantee platform [operational], raising both public and private sector resources to capitalize the SRGF, and facilitating the dialogue between host governments, project developers, commercial banks and other institutional investors.
Other than this, we aim at launching up to 50 iSTAR-C centers in member countries during [the] One Planet Summit, in Kenya.