MIGA and ISA Partner to Launch Solar Power Projects in Developing Countries
The Multilateral Investment Guarantee Agency (MIGA) and the International Solar Alliance (ISA) have joined forces to launch a multi-donor trust fund aimed at supporting and reducing the costs of solar power projects in eligible developing countries. This initiative, spurred by the Indian government's commitment to expanding global renewable energy access, will initially focus on Sub-Saharan Africa.
The MIGA-ISA Solar facility will leverage ISA's technical expertise and MIGA's ability to mobilize financing to create an innovative mechanism for accelerating 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.
This collaboration will see MIGA and ISA work together to launch solar power and distributed energy projects in eligible developing countries. Additionally, ISA will play a key role in a program 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.
The facility, managed by MIGA, will expand its guarantee issuances, mobilizing private capital for solar and distributed energy projects. ISA has pledged $10 million for the solar facility, with an initial commitment of $2 million and a target of raising $10 million. This marks the first program 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.
The International Solar Alliance (ISA) is a global treaty-based organization with 118 member countries, 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 expected to reduce operating costs by nearly 20%, leading to lower tariffs for customers.