Union Minister emphasizes the role of insurance for renewable energy projects, payment security mechanism and debt financing in attracting investment into renewable energy
A key focus area of the discussion was collaboration for accelerating the global energy transition, powered by solar energy, especially under the institutional framework of the International Solar Alliance, of which India is the President and France is the Co-President.
“We need to help countries who need green funds”
The Union Minister for Power and New & Renewable Energy of India emphasized the need for the International Solar Alliance to take up more solar energy projects, especially in Africa. “The economically strong countries will find the renewable energy funds themselves, while the economically weak countries would need green funds. We will have to help such countries who need funds”.
The two sides observed that almost half of the African continent does not have access to electricity. Noting that alongside energy transition, the focus has to be also on ensuring energy access as well, the Union Power and New & Renewable Energy Minister of India spoke of the need to help the ISA forge ahead in this direction. The two sides also observed that Africa does not have a problem of decarbonisation as access to electricity is very limited at present; in this scenario, getting access through solar energy is the cheapest and the simplest option, said the Minister.
Need Green Energy Insurance, Payment Security Mechanism and Debt Financing
The Minster expressed the need for three funds: insurance for renewable energy projects, payment security mechanism and arrangements for debt financing. “Once established, these funds will grow, due to contributions and interest payments; in India too, our investment is coming because of a fund we set up as a payment security mechanism,” the Minister said.
R. K. Singh said that the ISA should set up a de-risking mechanism and should also tap more green funds and thus promote grid-scale solar energy projects in the African continent.
The two sides also took note of the success of Kenya in renewable energy and discussed the idea of holding a conference by ISA in Kenya.
The Minister told the visiting delegation that even though India’s per capita emissions are one third of the global average, the country is the fastest in energy transition. He informed that while 43% of our capacity today is from non-fossil fuels, we have committed to reducing our emission intensity by 45% by the year 2030. He added that India is going to be a world leader in green hydrogen and that the country is adding renewable energy capacity at a fast pace, which will also help bring down the cost of energy in due time.