Global Solar Projects To Attract Investments Worth Over $380 Billion: ISA DG Ajay Mathur

Mathur noted that the sector has received $235 billion worth of investments in the first half of the year, while total investments received last year stood at $310 billion.

Global solar energy projects are becoming popular and are expected to attract investments worth over $380 billion this year, the International Solar Alliance (ISA) Director General, Dr Ajay Mathur, said on Monday. 

Speaking on the sidelines of the Singapore International Energy Week, Mathur said, “The good thing is that investment flow is increasing. It was about USD 310 billion for the whole of last year, and USD 235 billion investment has come in during the first half of this year,” Dr Mathur told PTI.“We expect it to be more than $380 billion this year,” as reported by PTI.

Mathur talked about promoting solar energy and making it a popular choice. He added, “Our goal is that in every member country, we make solar the energy of choice. ISA will have 120 member countries by the end of this year, up from 116 currently. The challenge is to get investments for small solar plants to reach out to the remote regions as approximately 74 per cent of the investment so far has gone to large-scale projects in the OECD and China. All of Africa has received just 2-3% from these funds.”

The ISA head also called for a focus on capacity building along with training and certifying people to execute and design solar projects and plants in the future. He noted, “We need to have a lot of investments in energy storage facilities as well as solar, hydro, and battery among others.” He also pointed out that the majority of the investments so far have been into large solar plants, ignoring the smaller ones. 

Mathur stated that there is a need to train bankers on loan application assessment for solar development. The ISA works with the member nations and guides them through the project management process along with helping them in framing policies and regulations required for the ecosystem to sustain, he stated. 

He underlined that the Middle East nations have a major role to play in the development of energy, citing the example of Abu Dhabi Future Energy Company, MASDAR, which invested in renewable energy projects in 40 nations since it’s establishment in 2006. 

“We have seen new investment in solar in Oman and Saudi Arabia. All these people will be the new solar producers of tomorrow,” Mathur noted. He said the private sector investors shouldn’t be wary about the risk on return in investments, especially calling out the investors’ hesitance to partake in development projects in Africa. 

Mathur stated that the default rate in Africa has been below 2 per cent, and this risk was for late payments and not non-payments. He noted that a guarantee payment system has been created in the region, ensuring that investments are returned. He called on the need for ‘pulling in and pooling of’ funds for small projects. 

Mathur pulled focus on the World Bank’s special line of credit and added, “People across the world have realised that if the energy transition is to be successful, you will have to carry everyone in this long-term development including Africa.”