Background

The world requires an investment of $12.5 trillion in renewable energy and $23 billion in off-grid solar by 2030 for universal energy access and a clean energy transition. However, current global solar investments are only 10% of the required amount for net-zero. Developing countries, home to over 50% of the global population, received just 15% of 2022’s renewable energy investments. Sub-Saharan Africa’s per capita renewable energy investment dropped by 44% from 2015 to 2021. Comparatively, investments in North America are 41 times higher, and in Europe, they are 57 times greater.

About Global Solar Facility

Innovative financial mechanisms are required to enhance solar investments worldwide especially in low-income countries. Such mechanisms must reduce barriers to global investments and enable their spread. The developments in the past decade in solar have eliminated technology risk, achieved grid parity, and enabled gigawatt scale power production.

The ISA’s Global Solar Facility (GSF) aims to catalyse solar investments across the world, starting with Africa’s underserved segments and geographies, thereby unlocking commercial capital. The GSF will primarily focus on decentralised solar solutions, rooftop solar, and productive use solar. Through this financing vehicle, which includes payment guarantees, insurance and investment funds, the ISA aims to mitigate project risks, provide technical assistance to address regulatory gaps, reduce currency risks, resolve contractual and financial uncertainties in the solar energy sector.

Following the approval and launch of GSF at COP27, the ISA Secretariat has been conducting discussions with potential investors including Member Countries, development finance institutions, pension funds, and potential investment managers from across the world. The ISA has signed MOUs with Multi-Lateral Investment Guarantee Fund (MIGA), Africa 50, West African Development Bank (BOAD) for facilitating investments through the GSF in Africa.

ISA, during its 6th Assembly session announced that the Global Solar Facility (GSF), a payment guarantee fund formed by ISA to stimulate investments into solar power projects, is set to receive a capital contribution of $35 million dollars.