NEW DELHI: The Multilateral Investment Guarantee Agency (MIGA), part of the World Bank Group, and the International Solar Alliance (ISA) have announced the establishment of the MIGA-ISA Solar Facility, a multi-donor trust fund designed to accelerate the global adoption of solar energy.
Initiated by the Government of India, the facility will leverage ISA's technical expertise and MIGA's financial mobilisation capabilities to create an innovative mechanism that supports solar power projects in eligible developing countries.
ISA, a global treaty-based organisation with 118 member countries, was established through a partnership between the governments of India and France.
Initially focusing on Sub-Saharan Africa, the facility will provide concessional financing tools, including first-loss instruments and reinsurance capacity, to enhance project bankability and reduce the cost of MIGA guarantees. MIGA and ISA will collaborate to launch new solar power and distributed energy projects, aiming to connect 300 million new households to electricity by 2030, aligning with the World Bank Group's and African Development Bank's initiatives.
ISA has committed USD 2 million in seed funding and aims to raise a total of USD 10 million for the facility. This program is the first under the guarantee component of ISA’s Global Solar Facility (GSF), which aims to raise USD 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.
“The facility will attract private investment by providing risk mitigation and concessional financing, helping to lower costs and close the energy gap in underserved regions,” he added.
To launch the facility, the two institutions have already supported a solar project in the Democratic Republic of Congo. MIGA guarantees and ISA financing are expected to reduce operating costs by approximately 20 per cent, leading to lower tariffs for customers.
“ISA is excited to collaborate with MIGA on the facility to provide cost-effective guarantee solutions for decentralised solar projects in Africa,” said Ajay Mathur, ISA Director General.
“This is an important milestone in the rollout of ISA’s GSF. We look forward to delivering clean energy through this program to impact the lives of millions of Africans who remain off-grid to date.”
Approximately 675 million people currently lack access to electricity, and without significant intervention, 660 million people will remain without electricity by 2030. The World Bank Group and the African Development Bank are partnering on an ambitious effort to provide at least 300 million people in Africa with electricity access by 2030.