(Bloomberg) -- International Solar Alliance, a group promoting solar energy, may set up a $700 million payment guarantee fund to spur investment in the technology in Africa.
The fund would be built with contributions from the alliance's member nations, and could be used to compensate project developers in the event of default by customers, ISA Director General Ajay Mathur said in an interview in New Delhi. The fund would be able to be used in countries that contribute to it, he said.
Africa is home to 60% of the best solar resources globally, yet it has only 1% of the world's solar generation capacity, the International Energy Agency said in a report. Nearly 600 million people, or more than 40% of the continent's population, lack access to electricity.
The solar potential has largely remained untapped due to reasons including investor concerns over payment risks and delayed project approvals, Mathur said. Mitigating those uncertainties is vital to spur the technology in one of the world's most energy-deprived regions, he said, adding that the ISA may consider similar funds for Asia and Latin America in the future.
ISA, headquartered in Gurugram on the outskirts of India's capital New Delhi, was formed in 2015 at the COP21 climate summit in Paris, with India and France taking the lead. Some 109 countries are signatories to its framework agreement.
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