Saturday, June 25, 2016

India’s ‘Unprecedented’ Plan to Bring Millions Out of Poverty and Power Them with Clean Energy

A Solar unit from Simpa installed on the terrace of a house. (Credit: Flickr User Asiandevelopmentbank) Click to Enlarge.
An estimated 240 million people (some estimate the total at more than 300 million) located in remote areas of India still do not have access to electricity, according to the International Energy Agency’s 2015 World Energy Outlook.  Most of their power comes from kerosene, wood, coal, and cow manure — sources that create serious pollution, especially when used indoors.
India and the United States have been working together to support India’s transition to clean energy, including its goal of deploying 175 gigawatts of renewable energy by 2022, including 100 gigawatts from solar power.  Both countries reaffirmed this commitment during Prime Minister Narendra Modi’s recent U.S. visit, listing a series of continued steps that will keep the momentum going.
Four U.S. foundations recently announced a major initiative to support efforts to bring reliable “off-grid” or “mini-grid” power — fueled by solar energy — to people in India who now are without it.  The philanthropies include Hewlett, as well as the David and Lucile Packard Foundation, the Jeremy & Hannelore Grantham Environmental Trust, and the John D. and Catherine T. MacArthur Foundation.  The four have put forth $30 million (which the government of India will match) to fund the program.
The first part of the foundations’ plan provides grants to clean energy business projects to help get them finance-ready.  Specifically this means resources that will provide the feasibility studies, finance documentation, land surveys, customer due diligence procedures, etc., necessary to fulfill loan requirements established by the Overseas Private Investment Corporation (OPIC), a U.S. government loan agency that works in developing nations.

Secondly, the initiative aims to encourage funding for solar energy projects from development finance companies like OPIC, the U.K. Department for International Development (DFID), the German Investment Corporation (DEG), the World Bank, the Asian Development Bank, and others, making it easier to attract private capital.

In effect, the foundation funding will help mitigate risk and boost global investor confidence.
The willingness of these foundations to put forth their money "changes the risk profile of a project, making it much more bankable," said Rachel Cleetus, lead economist and climate policy manager for the Union of Concerned Scientists.  "It will make it more attractive for private money to flow in.  It’s a very important blueprint that shows an innovative way of making a little money go a long way.  You can imagine many, many initiatives of this type blossoming around the world."

The program is modeled after a similar, successful one in Africa, the U.S.-Africa Clean Energy Finance Initiative, supported by the U.S. Department of State, OPIC, and the U.S. Trade and Development Agency (USTDA) which put forth an initial $20 million in grants in order to spur more than $1 billion in clean energy investments in Africa.

Read more at India’s ‘Unprecedented’ Plan to Bring Millions Out of Poverty and Power Them with Clean Energy

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