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<p style="text-align: center;"><em>ISA to Start $1 Billion Pilot Project in 2018</em></p>
<p>At the ongoing conference of parties (COP)23 in Bonn, the findings of the Common Risk Mitigation Mechanism (CRMM) feasibility study were shared with the participating members. If successful, CRMM could help develop over 1,000 GW of solar power generation capacity in low and middle-income countries by 2030.</p>
<p>Per the study, a ₹65.46 billion (~$1 billion) guarantee could bring in up to ₹981.9 billion (~$15 billion) of investments for 20 GW of solar photovoltaic (PV) capacity in more than 20 countries. The CRMM feasibility study outlines the 20 GW plan as a pilot phase with its eventual aim to leverage billions of dollars of impact capital to catalyze ₹65.46 trillion (~$1 trillion) of domestic and international private institutional capital, and transform global renewable energy markets.</p>
<p>The CRMM pilot phase will be launched in 2018. The aim of the pilot is to achieve a critical size and demonstrate its cost effectiveness in pooling and aggregating capital, and mitigating risks at an international level. This will be International Solar Alliance (ISA)’s first offering to deepen solar markets.</p>
<p>The study also presents recommendations to governments of low and middle-income countries to accelerate their solar energy generation capacity, at scale and in local currency. The idea is to develop a sustainable financial ecosystem, centered around an international guarantee mechanism, which could pool various types of risks and pool projects across many countries to lower the costs of hedging against those risks.</p>
<p>Financing of solar power generation assets in most of the developing countries suffers from a lack of risk mitigation tools, a high perception of risk among investors, high transaction costs, small project sizes, and lack of scale. Investors, developers, and other stakeholders need transparency and clarity of process, which is often missing in some countries.</p>
<p>The CRMM is designed to create a global solar market, boosting confidence among the international development community and private and public institutional financiers, to help meet international climate targets in countries with high solar potential.</p>
<p>A multi-stakeholder Taskforce comprising the Council on Energy, Environment, and Water (CEEW), the Confederation of Indian Industry (CII), the Currency Exchange Fund (TCX), and the Terawatt Initiative (TWI) designed the feasibility study on the request of 17 signatory countries of the International Solar Alliance.</p>
<p>The Common Risk Mitigation Mechanism (CRMM) is a multilateral market platform, which received initial support from seventeen countries with high solar potential, including India, France, Australia, Mali, Namibia, and Nigeria.</p>
<p>“As much as 75 percent of the cost of solar power is the cost of finance. CRMM is designed to pool multiple risks &#8211; political, off-taker, and foreign exchange risks &#8211; and have many participating countries, capitalized through multiple sources of public money. The pooling of risks would reduce double counting of risk variables, providing a single guarantee cover at prices lower than the additive price of existing insurance products,” said Dr. Arunabha Ghosh, CEO, CEEW.</p>
<p>“CRMM &#8211; the Paris Guarantee Fund &#8211; is a major step in the implementation of the <a href="https://mercomindia.com/india-ratifies-paris-climate-change-agreement/" target="_blank" rel="noopener">Paris Declaration</a> of the International Solar Alliance (ISA) adopted on 30 November 2015 and of the ISA Program aimed at mobilizing affordable finance at scale. This instrument will dramatically lower the cost of finance for renewable energy and the overall price of electricity – and will set an example worth emulating by all,” commented Upendra Tripathy, Interim Director General, ISA.</p>
<p>“Concerted actions undertaken in the context of the Alliance should focus on realizing the objectives enshrined in the Paris Declaration, which included: bringing our efforts together to reduce the cost of finance for solar energy and mobilize up to ₹65.46 trillion (~$1trillion) investments by 2030, and developing new, cost efficient and reliable solar technologies and applications,” said Ségolène Royal, Ambassador for the Arctic &amp; Antarctica Poles and Special Envoy for the implementation of the International Solar Alliance, Government of France.</p>
<p>The CRMM when implemented will be a great boon for the middle- and low-income countries, as there will be financing available to even fund residential rooftop solar projects.</p>
<p>Image credit: Mercom India</p>
<div class="saboxplugin-wrap" itemtype="http://schema.org/Person" itemscope itemprop="author"><div class="saboxplugin-tab"><div class="saboxplugin-gravatar"></div><div class="saboxplugin-authorname"><a href="https://cms.mercomindia.com/author/saumy/" class="vcard author" rel="author"><span class="fn">Saumy Prateek</span></a></div><div class="saboxplugin-desc"><div itemprop="description"><div class="designboxt">
<p><img class="alignleft" style="border-radius: 50%;height: 50px;margin-top: -4px;border: 1px solid #00b451" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/saumy-edited-1.png" width="50" /></p>
<p><strong style="text-decoration: underline">Saumy Prateek</strong> Staff reporter at Mercom India<br />
<a href="https://mercomindia.com/author/saumy/" target="_blank" rel="noopener">More articles from Saumy Prateek</a></p>
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<div class="authorboxn"><img class="alignleft" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/12/saumy-edited-1.png" width="79" height="102" /><a href="https://mercomindia.com/author/saumy/" rel="noopener"><strong>Saumy Prateek, </strong> </a>is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism &amp; Mass Communication from the Manipal Institute of Communication at Manipal University.<a href="https://mercomindia.com/author/saumy/">More articles from Saumy Prateek.</a></div>
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Study: 1,000 GW of Solar Can be Installed in Middle- and Low-Income Countries by 2030

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