International Solar Alliance meets in Paris to define roadmap for raising $1 billion.
NEW DELHI: The International Solar Alliance has begun working on a Common Risk Mitigation mechanism and is aiming to gather $1 billion under it by December 2018.
“There is a task force headed by the Terrawatt Initiative (TWI) with members from the World Bank Group, The Currency Exchange Fund (TCX), the Council on Energy, Environment and Water (CEEW), and also the Confederation of Indian Industries (CII),” Upendra Tripathy, Interm Director-General, ISA, told BusinessLine.
“This task force is holding a meeting on December 11 in Paris to define the fund-raising roadmap for the Common Risk Mitigating Mechanism (CRMM). The recommendations of this committee will be placed before the ISA steering committee,” he added.
According to the minutes of the fifth meeting of the International Steering Committee of ISA, the objective of CRMM is de-risking and reducing the financial cost of solar projects in member countries. The mechanism is slated to be rolled out by December 2018.
“CRMM will act as a pooled insurance with limited liability. Banks and multi-lateral institutions can contribute to the fund for a marginal premium. This will lower the cost of capital for developing renewable energy projects.
“The premium will be comparable to the rates by Exim banks. We hope it to be less than 1 per cent. We aim to have $1 billion under CRMM by December-end next year,” Tripathy said.
It is understood that the CRMM fund already has channelled $250 million through the India-UK Fund. The body aims to raise another $350 million through the Green Climate Fund and around $250 million from private investors. A $300-million India-French fund, similar to the India-UK Fund, is also being assessed.
An official aware of the possible CRMM working, said: “The risk basket CRMM will cover will be customised as per the member country. It can vary to cover hurdles such land acquisition to change of government, depending on the magnitude of risk in a member country.”