Over the past decade, India has significantly stepped up its cooperation with African countries in the renewable energy sector, as harnessing the continent’s abundant solar power potential is seen as crucial for economic growth and sustainable development.
At the heart of this effort is the International Solar Alliance (ISA), co-led by India and France and established at the Paris climate change negotiations in 2015 to accelerate the adoption of solar energy, ease access to finance and foster technological innovation.
India’s role in ISA and its support for the One Sun One World One Grid solar power project initiative underscores its commitment to a greener future. The collaboration will strengthen India’s renewable energy footprint while supporting Africa’s energy transition, providing clean and reliable electricity to millions. The World Bank has also partnered with ISA to facilitate the exchange of solar expertise.
Off-grid solar power systems and community solar mini-grids have become an essential part of the goal of achieving universal electricity access.
Despite Africa’s vast solar potential, the continent accounts for only 1.3% of the world’s installed solar power capacity and generates very little energy. This is due in part to geopolitical risks associated with developing regional solar grids, regulatory differences, and high infrastructure costs of building interconnection links. The ISA can seek to address these issues by fostering regional cooperation and trust through dialogue and governance structures.
But given that around 600 million people in Africa lack access to electricity, there’s a compelling case for scaling up distributed solar projects to fill this huge gap. These small-scale solar power plants generate energy close to users, rather than being distributed from national grids. BP predicts that solar power will account for around 30% of Africa’s energy production by 2050, which will require a significant increase in solar installations, suggesting huge growth potential for the sector.
Indian Prime Minister Narendra Modi and French President Emmanuel Macron attend the International Solar Alliance Conference 2018 (MEA Photo Gallery)
To support this growth, ISA has already announced a payment guarantee fund aimed at stimulating investment in solar projects. It is set to receive $35 million in capital contributions as part of the Global Solar Facility (GSF). The fund will include a $25 million investment from India and an additional $10 million from ISA itself. The fund will act as a crucial seed investment to attract additional private and public sector funding. ISA Executive Director Ajay Mathur has stated that with the primary goal of reducing financial risk for investors, the ISA aims to raise $100 million for the payment guarantee fund and raise up to $1.5 billion in financing for distributed solar projects.
Such off-grid solar power systems and community solar mini-grids have become an essential part of the ambition to achieve universal electricity access. The Indian government and its African partners have also set renewable energy and climate action targets. Mini-grids provide reliable electricity to rural and remote areas, boosting local economies and improving quality of life. Rooftop solar installations enable homes and businesses to generate their own electricity, reducing reliance on unreliable grid power and also reducing energy costs. Both solutions contribute to reducing carbon emissions and promoting renewable energy sources.
Despite these advantages, at the current pace, only about 12,000 new mini-grids will be built by 2030.
For India and its African partners to fully harness the potential of the solar power alliance, major challenges must be overcome.
Finance is key. Despite the benefits, at the current pace, only about 12,000 new mini-grids will be built by 2030, requiring about $9 billion in investment. But with increased investment, the World Bank projects that solar mini-grids could sustainably power 380 million people in Africa by 2030, requiring the construction of more than 160,000 mini-grids and a cumulative investment of $91 billion.
Further mechanisms to overcome financial hurdles are being developed through the ISA, such as the Sustainable Renewable Energy Risk Mitigation Initiative and the SolarX Grand Challenge. These efforts aim to secure stakeholder commitment, mitigate investment risk and foster solar innovation and adoption in Africa.
India is also investing in advanced grid management technologies and smart grid solutions to maintain stability, and is sharing its grid management expertise with African countries through capacity building programs and technical assistance.
The ultimate goal is to drive sustainable growth across the continent, with Africa often touted as the next engine of global growth. It will also demonstrate India’s support for the Global South through investments and partnerships, which will no doubt have diplomatic benefits.
