ISA is a member driven organization. It is stated in the guiding principles of the ISA Framework Agreement that members will take coordinated actions through programmes and activities aimed at better harmonizing and aggregating demand for, inter alia, solar finance, solar technologies, innovation, R&D and capacity building. So, the Member countries expect each other to cooperate closely and strive for establishing mutually beneficial relationships with relevant organizations, public and private stakeholders in the global value chain.
All the countries expect the Secretariat to assist the member countries and guide the National Focal Points (NFPs) in implementing the programmes. According to Article 3 (2) of the Framework Agreement of the ISA, Programme proposals are designed through open consultations among all National Focal Points, with the assistance of the Secretariat, and based on information shared by Members. The Secretariat ensures coherence among all ISA programmes. According to Article 3(4) of the ISA Framework Agreement, all decisions regarding the implementation of the Programme are taken by members participating in the Programme. They are carried out, with the guidance and assistance of the Secretariat, by Country Representatives designated by each Member. If you look at the structure of the ISA, the role of the secretariat is to guide and assist, which is very very important.
All the members who have ratified ISA FWA, wish to see this first treaty based global coalition to emerge after the Paris Climate Summit, to seriously take steps for mitigating the effects of climate change by proactively promoting the use of solar energy across the world. India and France have provided support in establishing bankable solar energy projects. They also will help in aggregation of demand, risk and resources at sub national, national and international levels.
See, the ISA has three key focus areas. The first is the Mobilization of Finance. To work on this, ISA has World Bank, European Investment Bank (EIB), European Bank for Reconstruction and Development (EBRD), ADB, AfDB, NDB, AIIB, GCF as its financial partners, which do lend a substantial part of their credit for solar energy projects. ISA has been mandated to mobilize over 1000 billion dollar of investment into solar sector by 2030. ISA is also working in the field of Credit Risk reduction and enhancing marketability of RE green Bonds. The second objective is helping member countries formulate bankable solar projects. For each country, the ISA has proposed a task force that will be headed by the National Focal Point, appointed by the Member countries. The task force will have four experts, each heading a different programme, namely: Scaling Solar Applications for Agricultural Use (street lights, pumps, etc.), Affordable Finance at Scale, Scaling Solar Minigrids, and Scaling Solar Rooftop. The banks and lenders are eager to invest. But, the issue is how to craft good and bankable projects where the risk is mitigated in such a way that the financiers want to invest in it. Features like elimination of counterparty credit risk and liquidity risk by developing the project transaction structure with elements like upfront provision of guarantee amongst others, can eliminate the risk of investors and lenders across the globe. We are working on that. ISA is also in the process of establishing a Common Risk Mitigation Mechanism (CRMM) and mitigation fund (with contributions from the World Bank, Overseas Development Assistance and from the Green Climate Fund) to insure projects against risks such as payment defaults from electricity procurers, foreign exchange fluctuations or political risks. Also, India has earmarked 20 % of its $10 Billion Line of Credit for African Countries to promote Solar Projects in ISA Member Countries in Africa. During the Founding Conference, India announced financing 27 projects in 15 countries by extending nearly $1.4 Billion worth of Line of Credit. France has earmarked one Billion Euros for solar projects. ISA soon is planning to bring out a Global Price Exploratory Tender. Call for Expression of Interest (EoI) has already been issued, requesting demand for solar water pump and street lights from ISA member countries. The third focus area is establishing Solar Technology Application and Resource (iSTAR) centers. The ISA has proposed to set up several iSTAR centers this year to manage capacity building, innovation, standards and certifications, quality control, etc. in the solar energy segment with the help of corporate sector.
A program of the ISA consists of a set of actions, projects and activities to be taken in a coordinated manner by Members. Programs are designed in a way to ensure maximum scale effect and participation of the largest possible number of Members. They include simple, measurable, mobilizing targets.
As I have already mentioned in the previous answer, ISA has joint declarations with various multilateral banks. ISA is in the process of establishing a Common Risk Mitigation Mechanism (CRMM) and mitigation fund to insure projects against risks such as payment defaults from electricity procurers, foreign exchange fluctuations or political risks. A preliminary study about the same was unveiled during COP 23 last year. So, we need to work in tandem with stakeholders, including: pension funds, sovereign wealth funds, family funds, investment advisors, developers, associations, regulatory authorities, brokerage houses, asset managers, and investment bankers to spur investments across supply chain.
The ‘Affordable Finance at Scale’ programme of the ISA was introduced to look at innovative financial mechanisms and credit enhancement mechanisms intended to increase the risk-free funds for large-scale solar energy deployment. The World Bank, European Investment Bank, TeraWatt Initiative, CEEW, TCX, and CII are some of our partner stakeholders who are helping us currently to come out with concrete projects.
We are requesting countries like Australia, Netherlands, UK to offer earmarked finance like France and India.
We are lucky to get cooperation from all across the globe. As you know ISA will help in setting up a Solar Technology and Application Resource Centre (iSTAR C). Under the aegis of iSTAR C (in each member country who is willing to establish such a center), there will be ten Centers of Global Excellence in the ISA member countries. Each of these centers’ is expected to be a hub for solar innovation, solar R&D, testing, certification, quality control etc. Currently National Institute of Solar Energy (NISE), India and INES, France are jointly working on the idea. Each center of Global Excellence will network with 12-13 member countries in a naturally beneficial and synergetic manner. For this ISA has partnered with French National Institute for Solar Energy (INES) and NISE.
Clean Energy Solutions Center (CESC) with prominent contributions from the Australian Ministry of the Environment and Energy and NREL (US National Renewable Energy Laboratory), Indian National Institute for Solar Energy (NISE) , Solar Energy Research Institute of Singapore (SERIS), French Development Agency (AFD), Schneider Electric Foundation , University of Fiji in association of the Pacific Islands Development Forum as part of the Center of Renewable Energy (CORE), Amity University (India), East African Centre of Excellence for Renewable Energy and Energy Efficiency (EACREEE).
But, addressing the issue of innovation is a challenging task. In order to steer this process, ISA has constituted a ‘Global Leadership Task Force on Innovation’ with reputed corporate entities. This will help ISA in getting adequate inputs and ideas to chalk out and implement the future course of innovation in order to effectively implement the programmes of ISA. This Task Force will develop an innovation strategy, develop a concept document, present a strategy to involve public private platforms to aggregate demand, list out risks that hinder innovation, suggest innovation and create an action plan for 10 countries to start with actions towards transformational impact in the areas of innovation in technologies, business models, finance, research and development and capacity building. The Federation of Indian Chambers of Commerce and Industry (FICCI) will anchor and service the Taskforce.
The iSTAR C (Solar Technology Application Resource-Center) program is the pivot of this endeavor. I have already spoken about this very important initiative of ISA in the previous question. You have rightly said that successful implementation of ISA programs would need capacity building across domains on a very large scale. iSTAR C aims at fostering knowledge dissemination and capacity-building by building a network of training and technical centers in order to foster knowledge dissemination and capacity-building with regards to solar energy and infrastructure projects. iSTAR-C centers include both: Centers of Excellence dedicated to R&D, innovation and top-notch expertise and Technical Centers that will provide technical and vocational training tailored to the specific needs of each country.
The aim is that: each ISA participating country should have direct access to an iSTAR C at national or regional levels. The ISA, the Bureau of Indian Standards (BIS) and FICCI with the support of Ernst & Young are setting the stage for a comprehensive reflection on the standardization and the development of benchmark criteria for iSTAR C.
In addition, developing fellowships for midcareer professionals, to enable them to augment their knowledge in the field of solar technology, its management and economics and building up on some training centers to give them technical resources like test and certification is also one of the goals of iSTAR C. The ISA Fellowship Program will offer fellowships to 20 promising midcareer professionals from ISA member countries to enable them to improve their knowledge in the field of solar technology, its management, and economics, through a tailored course divided between the partner organizations.
The ISA has launched a survey on Member states’ and prospective members’ specific needs regarding solar energy. According to preliminary results, the general trend shows that participating states are mostly interested in short- to medium term trainings (to be implemented in the next 6 to 12 months) for all types of audiences (solar technicians, solar engineers, trainers, policymakers, investors). In particular, 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, aiming at a comprehensive overview by the end of summer 2018.
Besides, the East African Centre of Excellence for Renewable Energy and Efficiency (EACREEE) 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 at many fronts.
ISA will benefit at three levels by collaborating with other International Institutions: Institutional level (IRENA), in connecting wide range of Key Actors (REN 21) and at Ideation Level (REEEP). ISA can benefit from the wide range of products and services at institutional level in collaboration with IRENA like: Annual reviews of solar energy employment; Solar energy capacity statistics; Solar energy cost studies; solar Readiness Assessments, conducted in partnership with governments and regional organizations, to help boost solar energy development on a country by country basis; The Global Atlas, which maps resource potential by source and by location; Solar energy benefits studies; REmap, a roadmap to double renewable energy use worldwide by 2030; Solar energy technology briefs; Facilitation of regional solar energy planning; Solar energy project development tools like the Project Navigator, the Sustainable Energy Marketplace and project facility.
Similarly, wide range of key actors in the global renewable energy policy multi-stakeholder network can be connected in collaboration with organization like REN 21. Knowledge exchange can be facilitated, policy development and joint action towards a rapid global transition to renewable energy can be taken through such a collaboration. REN21 brings together governments, nongovernmental organizations, research and academic institutions, international organizations and industry to learn from one another and build on successes that advance renewable energy. To assist policy decision making, REN21 can provides high quality information, can catalyze discussion and debate and can supports the development of thematic networks. Being ISA’s partner organization, REN 21’s core strength can be utilized.
For ideation we can collaborate with REEEP on the paradigm commonly known as green growth. The organization invests in clean energy markets to help developing countries expand modern energy services and improve lives; increase prosperity and economic dynamism; and keep CO2 emissions in check.
The aggregation of demand across various countries would encourage entry of bigger players, thus reducing the loading of cost by intermediaries. If a country individually issues a tender, say for 100 solar pumps, a manufacturer of solar panels or solar pumps or even a integrator with substantial experience might not be interested in the tender. However, if ISA aggregates the requirement of solar pumps of various countries and issues a price exploratory tender for 500,000 pumps, one can assume that manufacturers of the equipment, and other big players will participate in the tender, thus obviating the intermediaries and their costs. Further, with increased demand for capital equipment of the solar industry, principles of economy of scale have already begun to operate, thus reducing the price of these components and consequently the capital cost of the solar projects.
The ISA wish to set up a Project unit, a Standard unit and a Rate Contract unit in coming months. According to Article 3 of the Framework Agreement of ISA, a programme of the ISA consists of a set of actions, projects and activities to be taken in a coordinated manner by the Members. Programmes are designed in a way to ensure maximum scale effect and participation of the largest possible number of members. Programme proposals are designed through open consultations among all National Focal Points. Setting up of these units will bring all the components required to ensure ‘the bankability’ together.
Ratification is a long process. The Sovereign countries must obtain the Executive approval for signing and ratification. Thereafter, the Cabinet/ Parliament or any other competent body authorized is to approve the ratification of ISA FWA through the concern Ministry/ Department. After this, the formal Instrument of ratification needs to be deposited with Ministry of External Affairs, GoI. Many of our prospective member countries are at various stages of this process and we are hoping to see expedited endeavor from all the members in coming times. As on 1st July 2018, 65 countries have signed the ISA Framework Agreement and 35 have ratified it.