The Multilateral Investment Guarantee Agency (MIGA), part of World Bank Group Guarantees, and the International Solar Alliance (ISA) have announced the establishment of MIGA-ISA Solar Facility (Facility), a multi-donor trust fund.
The facility was catalyzed by the government of India and its support for expanding the access to support renewable energy globally.
The facility will combine ISA’s technical expertise with MIGA’s capacity to mobilize financing, creating an innovative mechanism to accelerate the global adoption of solar energy.
It will offer concessional financing tools, including first-loss instruments and reinsurance capacity, to improve project bankability and lower the cost of MIGA guarantees.
Additionally, both MIGA and ISA will collaborate to launch new solar power and distributed energy projects in eligible developing countries. Initially, the facility will focus on Sub-Saharan Africa, with plans for global expansion.
Through this initiative, ISA will be an important partner of the program supported by the World Bank Group and the African Development Bank to achieve 300 million new electricity connection in Sub-Saharan Africa by 2030.
The facility will be administered by MIGA, and it will help scale up its guarantee issuances, mobilizing private capital for solar and distributed energy projects. The facility will provide cost-effective risk mitigation instruments to support the growth of solar projects in ISA member countries.
ISA has committed seed-funding of $2 million, with a goal of raising $10 million for the facility. This is 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.
“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.”
To launch the facility, the two institutions have already delivered a solar project in the Democratic Republic of Congo, where MIGA guarantees and ISA financing are expected to reduce operating costs by approximately 20%, resulting in lower tariffs for customers.
“ISA is excited to collaborate with MIGA on the facility to provide cost-effective guarantee solutions for decentralized solar projects in Africa,” said Ajay Mathur, ISA Director General.
“This is an important milestone in the roll out 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.”
About 675 million people lack access to electricity, and without significant efforts, 660 million people will remain without electricity by 2030.
The World Bank Group and African Development Bank Group are partnering on an ambitious effort to provide at least 300 million people in Africa with electricity access by 2030.
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