Regional: Deploying Solar Systems at Scale

Energy / Renewable energy generation - solar

The knowledge and support technical assistance (KSTA) will deploy solar energy at scale via three pillars: (i) identification and development of solar project pipeline (which may include pilot testing); (ii) identification of financial instruments and assistance in mobilization of funding for solar investments; and (iii) knowledge management and capacity building. Solar is the world's largest available energy resource, much larger than all other resources combined: the solar radiation hitting the earth every hour is more than total global energy consumption. In the context of sustainable development and climate change, scaling up of solar energy investments is one of the best options with respect to distribution of the resource in countries which are energy poor in terms of conventional energy, as well as a broad spectrum of applications and scale and speed of deployment. This will also help implement the cooperation agreement between Asian Development Bank (ADB) and the International Solar Alliance (ISA).

The KSTA is estimated to cost $2,000,000, which will be financed on a grant basis by Clean Energy Fund of the Clean Energy Financing Partnership Facility (CEFPF). The government will provide counterpart support in the form of counterpart staff, office accommodation, and other in-kind contributions. The governments have been informed that approval of the TRTA facility does not commit ADB to finance any ensuing project.

The KSTA will support identification of solar energy projects, financial instruments and funding mechanisms, and related capacity building and policy advice initially for the South Asia Region and shared with other regions through Energy Sector Group in Sustainable Development and Climate Change Department of ADB. Potential projects will utilize solar energy for electricity generation, irrigation, mini-grids, and other applications which all require similar viability assessments covering technical, financial, economic, safeguards, governance, and procurement aspects. Capacity building and policy advice will be tailored to support the ensuing investments (_learning by doing_) and other activities covered by the cooperation agreement between ADB and ISA. This KSTA facility is not listed in the current County Operations Business Plans (COBP) for the countries.

Output 1: Solar project pipeline identified and developed. The KSTA will support identification and development of a pipeline of solar energy projects including electricity generation, irrigation, mini-grids, and other end-use applications (e.g., solar thermal for heating and cooling systems). High-level technologies will be considered when candidate technologies have been assessed. This output may include grid impact assessments to determine need for transmission capacity upgrades, substation augmentation, and other grid infrastructure upgrades; and similar assessments for other large-scale solar end-use investments. For selected projects which meet country readiness checklists or are at an advanced stage of preparation, the TRTA facility will support technical, economic, financial, procurement, governance, and environmental and social safeguards due diligence for consideration by ADB. Opportunities for gender mainstreaming will be incorporated into projects to the extent practical, especially those which include solar energy end-use applications.

Output 2: Financing instruments for solar deployment identified and scaled up. This output will explore options for innovative financing at scale including a common risk mitigation mechanism (CRMM), a global fund for achieving Sustainable Development Goal 7 (SDG7), and a corpus fund for ISA operations. Pursuant to a feasibility study for a CRMM completed in late 2017, World Bank is expected to approve an investment operation to mobilize the CRMM in 2019. ADB will identify entry points to the CRMM, and will evaluate options including direct equity investments, green bonds, and co-financing from specialized funds, other development partners and commercial sources for investment in the CRMM and a SDG7 fund.

Output 3: Knowledge management and capacity of ISA improved. ADB will support ISA country participation in knowledge sharing platforms such as the Asia Clean Energy Forum and similar events in the region and outside, with emphasis on learning-by-doing integrated with Outputs 1, 2, and 4. This output will also support strengthening capacity of the ISA Secretariat and include documenting of best practices for gender mainstreaming in solar energy deployment. Social media and websites will be the primary mode of knowledge sharing. Reports, best practice guidance, workshop proceedings, and other knowledge products will be published on a periodic basis on ADB's website and social media and through conferences such as the Asia Clean Energy Forum.

Output 4: Pilot testing of project approach identified and implemented. Pilot testing will be considered in cases where there is demand from a DMC, an identified counterpart agency, readily available technology or system(s) to be deployed on a prototype basis for up to 12 months maximum, and where a successful pilot is scaled up in an ensuing project.

An inception mission was undertaken for the TA in October November 2019 to deliberate upon and identify outputs under the TA across the three pillars of support. The inception mission identified potential activities under each of the pillars of the TA encompassing:

i. Support in implementation of existing programs of the ISA in the near term;

ii. identification and support in development in new programs in the medium and long-term;

iii. ADB missions to the six South Asian DMCs for project pipeline development;

iv. Risk mitigation instruments in the region; and

v. Support to the ISA Secretariat for day-to-day activities and ADB related activities through a senior national consultant as the lead coordinator for the TA.

Solar project pipeline identified and developed

Financing instruments for solar deployment identified and scaled up

Knowledge management and capacity of ISA improved

The TA is supporting the ISA Secretariat, through the National Coordinator, in implementation of its programs, development of new programs, identification of project pipelines, and development of innovative financing instruments.

The ADB and the ISA have planned to undertake capacity building workshops for different stakeholders such as the policy makers, the private sector, the local financial intermediaries etc. The workshops have, however, been postponed on account of the COVID-19 pandemic and consequent travel restrictions.