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MIGA and ISA will work together to launch solar power and distributed energy projects in eligible developing countries | Representational Photo
The Multilateral Investment Guarantee Agency (MIGA), part of the World Bank Group Guarantees, and the International Solar Alliance (ISA) have established a multi-donor trust fund to support and reduce the costs of solar power projects worldwide, according to a PTI report.
The MIGA-ISA Solar facility will initially concentrate on Sub-Saharan Africa. This initiative was spurred by the Indian government’s support for expanding global renewable energy access.
“The facility will combine ISA’s technical expertise with MIGA’s ability to mobilise financing, creating an innovative mechanism to accelerate the global uptake of solar energy. It will provide concessional financing tools, including first-loss instruments and reinsurance capacity, to enhance project bankability and reduce the cost of MIGA guarantees,” the ISA said on Friday.
MIGA and ISA will work together to launch solar power and distributed energy projects in eligible developing countries.
“Through this initiative, ISA will be a key partner in the programme supported by the World Bank Group and the African Development Bank, aiming to achieve 300 million new electricity connections in Sub-Saharan Africa by 2030,” added MIGA in another statement.
The facility will be managed by MIGA and will help expand its guarantee issuances, mobilising private capital for solar and distributed energy projects.
ISA pledges $10 million for solar facility
ISA has pledged $10 million for the solar facility, with an initial commitment of $2 million and a target of raising $10 million. This is the first programme under the guarantee component of ISA’s Global Solar Facility (GSF), which aims to raise $200 million for projects in Africa.
“MIGA is delighted to host the MIGA-ISA Solar Facility and support Sub-Saharan Africa in accessing reliable and clean electricity,” said Hiroshi Matano, MIGA executive vice president. He added that the facility would attract private investment by providing risk mitigation and concessional financing, thereby lowering costs and addressing the energy gap in underserved regions.
“This is a significant milestone in the rollout of ISA’s GSF. We look forward to delivering clean energy through this programme to improve the lives of millions of Africans who are still off-grid,” said ISA Director General Ajay Mathur.
For the unversed, ISA is a global treaty-based organisation with 118 member countries. It was launched through a partnership between the Governments of India and France.
To launch the facility, the two institutions have executed a solar project in the Democratic Republic of Congo, where MIGA guarantees and ISA financing are likely to slash operating costs by nearly 20 per cent. If all goes right, this will lead to lower tariffs for customers.
First Published: Sep 06 2024 | 5:35 PM IST
