Over a dozen nations, inclulding Argentina, France and India, have supported commissioning of a study to define and structure a common risk mitigation mechanism (CRMM) for solar power generation projects.
"Argentina, Burkina-Faso, Chad, France, India, Ivory Coast, Mali, Namibia, Niger, Nigeria, Senegal, Uganda and Yemen have jointly supported commissioning of a study to define and structure a Common Risk Mitigation Mechanism (CRMM) for solar power generation projects in solar rich countries today," the Ministry of New and Renewable Energy said in a release.
This is a major step in the implementation of the Paris Declaration of the International Solar Alliance (ISA) adopted on November 30, 2015, and of the ISA programme aimed at mobilising 'affordable finance at scale', the release said.
This instrument will dramatically lower the cost of finance for renewable energy and the overall price of electricity.
Today, the cost of capital represents a substantial amount of the final costs of renewable energy, in particular solar PV.
The Council on Energy, Environment and Water calculates that in India it represents 70 per cent of the total cost of solar power.
The proposed CRMM will offer a simple and affordable tool that will create a secure environment for private institutional investment in solar assets.
The instrument will help diversify and pool risks on mutualised public resources and unlock significant investments.
The International Solar Alliance is an initiative jointly launched by the Prime Minister of India and the President of France on November 30 2015 at Paris, in the presence of the Secretary General of the UN, on the side lines of COP21.
Under the ISA, solar rich countries lying fully or partially between the Tropics are invited to share and aggregate data regarding their needs and objectives; emulate successful practices; and set up common mechanisms and instruments, in order to address obstacles to deployment at scale of solar energy.
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