International Solar Alliance partners with Nordic institutional investors to mobilize $1 trillion
The International Solar Alliance (ISA) announced today the formation of an Investment Advisory Committee comprised of leading institutional investors, including multilateral and commercial organisations, to advise the ISA on its goal of mobilising USD 1 trillion in solar energy investments by 2030 to address Energy Access, Energy Transition, and Energy Security at the global and national levels. Senior representatives from Africa50, CDPQ Global, IFC, the Development Bank of Southern Africa, Capricorn Investment Group, and Temasek have been confirmed as members of the Advisory Committee.
The advisory committee's efforts will inform and direct partnerships formed by ISA to meet the US $1 trillion solar investment target, such as the new partnership announced today with Denmark's Investment Fund for Developing Countries (IFU), CONCITO, and World Climate Fund. The partnership's vision is to translate this goal into real investments on the ground, involving investment and finance actors - initially focusing on Nordic countries - to mobilise more private finance for solar energy in emerging markets and developing economies, thereby contributing to the world's transition to net zero GHG emissions and improving access to electricity for underserved populations.
In response to these developments, Dr. Ajay Mathur, Director General of ISA, stated, "We are pleased to announce the formation of the Advisory Committee and are greatly encouraged by the participation of influential Nordic partners." The members of the Advisory Committee have a breadth and depth of experience, and their recommendations on solutions will help drive investments across regions. Their guidance, as well as partnerships with IFU, CONCITO, and the World Climate Fund, will assist us in identifying opportunities and establishing the conditions that will allow for an increased flow of institutional capital into solar energy. These significant partnerships and advisors serve as validation of our Towards 1000 journey, while also representing a diversification and broadening of stakeholder interest in solar energy. We are encouraged by our conviction that significant and sustainable progress can be made in emerging and developing economies across the priority themes of energy access, power system decarbonization, and new solar opportunities."
The new ISA partnership will build on the Solar Investment Action Agenda, which was released at COP26, as well as ISA's ongoing efforts with the World Resources Institute (WRI), Bloomberg Philanthropies, and BloombergNEF to develop a Solar Investment Roadmap, which will be launched in 2022.
The collaboration also builds on previous trends in which private investors and public financial institutions have been among the driving forces in committing to renewable energy investments and ensuring that finance flows to emerging and developing economies. Its goal is thus to accelerate public-private "ambition loops," with participation including:
- Dialogues between investors, public and private financial institutions, and governments on concrete measures that can aid in the generation of investment pipelines, including through enabling planning and regulation;
- Identifying targeted investment vehicles and platforms capable of channelling finance through to tangible assets; and,
- Implementation of risk-mitigation tools backed by blended finance
"We know that the world needs to dramatically scale up investments in renewable energy, including solar, to achieve our climate and development objectives," said Connie Hedegaard, Chair of CONCITO's Board and former EU Commissioner for Climate Action. We also know that the majority of this investment will have to take place in developing countries and will have to be financed privately. The Nordic region can make a significant contribution. We have investors and businesses who are ambitious and willing to take action. We have demonstrated the feasibility of public-private "ambition loops" in practise. In addition, we have public finance that can catalyse private investment. CONCITO is proud to collaborate with the International Solar Alliance on this ambitious project, deepening our relationship with the World Resources Institute."
"As the Danish DFI, we are committed to scaling up investments in climate and clean energy," said Torben Huss, CEO of Denmark's Investment Fund for Developing Countries (IFU). We have a particular interest in and track record of assisting in the channelling of institutional capital to emerging and developing economies."
"Ambitious frontrunners in the investment community have made long-term commitments to net zero targets," said Jens Nielsen, CEO of the World Climate Foundation. They are focusing on converting this into tangible investments in the near future through efforts such as the Climate Investment Coalition. The third logical and necessary step is to make concerted efforts to increase levels of investment in developing countries, where investment needs are greatest. ISA's goal is to generate large-scale investments, and WCF is excited to join the effort to mobilise $1 trillion in solar investments."
In addition, as part of its ongoing efforts to maintain engagement with the international finance community, ISA intends to organise a virtual "Investment Series," which will be supported by the Climate Policy Initiative (CPI). The series will include discussions on structured, smart, and sustainable investment models and solutions with CEOs of financial institutions and key decision makers in ISA Member Countries.