NEW DELHI: The United States’ decision to withdraw from the India-led International Solar Alliance (ISA) is expected to have a limited financial impact on the organisation, but its absence could deprive the alliance of valuable strategic guidance, officials and experts said on Sunday.
Over the past three years, the US has contributed $2.1 million to the ISA—just over one per cent of the total $125 million mobilised by the alliance.
The ISA is a member-driven intergovernmental organisation focused on promoting solar energy deployment and is jointly led by India and France. It currently has 125 member countries. “This year, the US contribution was about USD 1 million, which is quite low compared to the total funding and contributions from other developed countries,” a senior government official associated with the ISA said.
“It will not affect our operational activities, particularly capacity-building efforts or the initiation of new projects across member countries,” the official added.
Echoing this view, the Union Ministry of New and Renewable Energy (MNRE) stated that the US withdrawal would not have any immediate operational impact. The ISA, which aims to mobilise $1 trillion in solar investments by 2030, will continue to pursue its core objectives, the ministry said.
The development follows an executive order signed recently by US President Donald Trump, announcing the country’s withdrawal from the ISA and 66 other international organisations. The administration described these bodies as “wasteful, ineffective, or harmful” to US national interests, security, and sovereignty.
The US joined the ISA as its 101st member in 2021, when then special presidential envoy for climate John Kerry signed the accession documents and handed them over to India’s Environment Minister Bhupendra Yadav. The US began playing a more active role in the alliance in 2023, including proposing the creation of a separate fund to fast-track renewable energy projects.
Former ISA Director General Ajay Mathur said that while the financial loss would be marginal, the alliance would miss the US’s expertise and counsel. “India will not miss the US financially, but it will certainly miss its advice and guidance,” Mathur said, adding that the Biden administration had shown serious engagement with the ISA and provided timely strategic inputs.
Based on US recommendations, the ISA established a Multi-Donor Trust Fund (MDTF) governed by a donors’ steering committee. Under this mechanism, up to 8 per cent of funds can be used for administrative expenses, while the remainder is allocated to projects.
“Earlier, contributions went into the general budget, which slowed decision-making because project approvals required clearance from the general assembly, which meets only once a year,” Mathur said. “The MDTF has allowed faster implementation, as the steering committee can meet more frequently.”
The MDTF aims to mobilise investments, support high-impact solar projects, digitise utilities, and foster innovation across member countries.