What is the ‘Solar Facility’ launched at the 5th ISA Assembly Meeting? Discuss its utility in enabling capital flow for solar power projects in under-served areas.

Solar Facility is a payment guarantee mechanism under the ISA framework. It was launched to attract investments into the solar energy sector, in line with the ISA goal of unlocking $1 trillion in solar energy investments by 2030.

Solar Facility:

• The cost of financing and technology will be reduced by this mechanism.
• Solar Payment Guarantee Fund and Solar Insurance Fund are its two financial components.
• This facility will crowd-source investments from various private donors from across the world.
• The private capital will flow into under-served solar power projects in Africa.

Advantages:

• It will reduce lenders apprehensions.
• It will enable finance to flow for projects which may not receive funding otherwise.
• These investments will help in reducing the cost of technology and financing.

This is a step in the right direction to bolster growth in the solar energy sector on a global level and combat climate change.