(MENAFN- Live Mint) New Delhi: In a move aimed at further cementing India's position as the voice of the Global South, the International Solar Alliance (ISA) is planning to set up an Asia Solar Facility for securing investments and funds for solar projects in underdeveloped and emerging economies on the continent.

In an interview, Ashish Khanna, the director general of ISA, said that the planned fund would largely look at attracting long-term investments and financing from pension funds and multilateral organizations like the Asian Development Bank.

Last month, ISA announced the Africa Solar Facility, a $200 million catalytic fund, to boost investments in the solar power space in Africa.

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“I think the next (thing) we might look at is an Asia facility that looks at long tenure pension functions..., which will initially think of what can we do in India and other places that can attract long-term financing,” Khanna said.

The other Asian countries among its 123 members include UAE, Bhutan, Nepal, Sri Lanka, Mongolia, Myanmar, Japan, Cambodia, Saudi Arabia, Oman, Syria, Singapore and Bangladesh.

While saying that India is the third-largest solar power generator in the world, Khanna expressed hope that with a likely slowdown in the solar space in the US, India may soon become the second-largest producer of solar power.

Long term funds

Noting that long-term investors such as sovereign wealth funds and pension funds are not investing as per their potential in the renewable energy space even in emerging markets like India, he said,“A trend that is also important in the world is that long tenure funds, which are sovereign wealth funds and pension funds, are still not investing in renewable energy.”

If a 10-year loan can be converted into a 30-year loan, the cost will be drastically reduced, he said.“So, why are 30-40 year investments not happening as much in renewable energy? That's the next thing that we would like to actually explore. $13 trillion of pension funds are lying in the world,” Khanna added.

Sovereign wealth funds (SWFs) are among the highest-profile long-term investors, and serve as vehicles for investing domestic capital surpluses in international markets, aiming to generate strong financial returns. Public pension funds provide consistent returns to fund pension schemes and other social security benefits in their home countries.

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According to a PwC report, as of 2023, sovereign wealth funds and pension funds had $32.8 trillion worth of assets under management. If aligned with the priorities of the energy transition, their resources could go a long way towards bridging the financing gap in energy transition and renewable energy, the report said.

He noted that for the next six months, ISA would work towards operationalizing the Africa Solar Facility, post which its plans for a similar facility for Asia would take concrete shape.

“Now, the work has to begin in terms of setting it up in Africa and in terms of pipelines of where, what kind of projects are going to be priority. We are likely to begin with the work in Nigeria, which has the largest energy access gap. We are working with the Nigeria Sovereign Investment Authority,” he said.

Solar power hub

He further stated that the ISA would invest $15 million in the Africa facility's corpus, and the Nigerian sovereign wealth fund would contribute about $150 million. Furthermore, the Indian government is also expected to contribute its investments as part of ISA's $15 million commitment.

“We are waiting for the final approval. Once the government of India gives final approval, then part of the $15 million will come from there,” he said.

Khanna, who took over as DG of the India- and France-backed multilateral body in March this year, said that ISA aims to develop a global hub for solar power in India, at its Gurugram headquarters, which he said may emerge as the 'Silicon Valley' of solar energy.

ISA has also helped establish centres of excellence in 12 countries, including Ghana, Ethiopia, Senegal, Bhutan, Cameroon, and Cuba. Four more centres will become operational by December, bringing the total to 16, and it is anticipated to increase to 50 in the years ahead, he said.

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Noting that ISA set up the ISA Academy to provide online technical lessons, he stated that it will also proceed with an AI-based training platform within six months. Furthermore, a global capability centre for solar energy, known as the International Centre of Excellence, will also be established at its headquarters in Gwal Pahari, Gurugram, and is expected to be operational within five years.

ISA was launched in 2015 during the UN Climate Change Conference (COP21) in Paris. With most of its members from Africa and Latin America, the organisation serves as a strategic platform for enhancing India's position as a champion for sustainability and a major voice for underdeveloped and emerging countries.

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