After a solar risk mitigation plan was announced at the first International Solar Alliance (ISA) summit in March 2018, the World Bank and French development bank AFD are now working together on the scheme to help remove barriers to solar in developing countries, which is often held back by perceived risk.
Back in May, several countries agreed to support the commissioning of a study on a common risk mitigation mechanism for PV generation.
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The new Global Solar Risk Mitigation Initiative (SRMI) will encompass policy, technical and financial issues associated with scaling up solar deployment.
“Through this new, integrated approach, we hope to further scale up solar energy use by reducing the cost of financing for solar projects and de-risking them, especially in low-income countries,” said Riccardo Puliti, senior director of Energy and Extractives at the World Bank.
The SRMI’s integrated approach will include:
- Support for the development of an enabling policy environment in targeted countries
- A new digital procurement (e-tendering) platform to facilitate and streamline solar auctions
- Targeting relatively small (under 20MW) solar projects, offering a more comprehensive risk mitigation package of support to a wider range of investors and financiers to promote scale up at later stages. The financial risk mitigation package offered by SRMI will be supported by technical assistance and concerted engagement on planning, resource mapping and power sector reforms to ensure the creditworthiness of utilities in these countries
- Mitigating the residual project’s risks through adequate risk mitigation financial instruments for both on and off-grid projects
“AFD is glad to join forces with these partners to deliver on the commitments made at COP21, to bring solutions to de-risk potential solar investments and mobilize the private sector to invest in sustainable development,” said Rémy RIOUX, CEO of AFD.