MIGA FY23 Highlights

This fiscal year marks the signing of MIGA’s 1,000th project, which provides guarantees allowing the Senegalese government to increase its interest in the current operator of container terminals at the port of Dakar and future port of Ndayane. The MIGA-covered loan facility is expected to decrease the present value of the total debt service of the facilities being refinanced. In addition, the reprofiling of debt service over a longer tenor is estimated to decrease debt service obligations in the near term, providing more flexibility in the current challenging global financing conditions. Moreover, the additional dividends derived from the government’s increased shareholding in DP World Dakar are expected to lead to a positive return on investment for the government based on DP World Dakar’s historical performance and future outlook.

Ports play a key role in Senegal’s economy and plans for future development of the country. With more than 700 kilometers of coastline, Senegal’s position at the westernmost point of Africa and the Sahel gives the country a strategic advantage to become a regional hub linking Africa to the rest of the world. Located at the crossroads of several key maritime routes, the port of Dakar offers ships competitive navigation time in West Africa. This project supporting the government of Senegal’s investment in the port of Dakar is the most recent example of MIGA in action and demonstrates MIGA’s commitment to its mission of supporting economic growth, reducing poverty, and improving people’s lives by mobilizing cross-border private investment into developing countries.

Together, MIGA and IFC provided equity investment, a loan, and guarantees to support the ongoing construction and operation of Safaricom Ethiopia’s greenfield telecommunications network. The cooperation between MIGA and IFC is helping to create more affordable internet, reliable mobile connectivity, and technology access for people and businesses in the country. By increasing access to digital services, the project has the potential to help create up to 2 million direct and indirect jobs in Ethiopia, contribute to the country’s sustainable future growth, and increase both financial and social inclusion for Ethiopians.

MIGA’s support will provide 10-year guarantees of $1 billion to cover the equity investments of Safaricom Ethiopia’s shareholders: Vodafone Group, Vodacom, Safaricom, and British International Investment. A portion of the MIGA guarantees, $76 million, will come from the MIGA Guarantee Facility, part of the IDA Private Sector Window, in the form of a first-loss layer. MIGA’s guarantees in the digital infrastructure sector are helping to connect the unconnected and to create opportunities, particularly in Africa and in fragile and conflict-affected countries. With this project, MIGA’s contribution to the enhancement of the digital infrastructure reached $1.87 billion over the past decade, mainly in fragile and conflict-affected countries.

The Somali energy sector is one of the most underdeveloped in Africa, with electrification rates estimated at 35 percent. Much of Somalia’s public electricity infrastructure was destroyed during its internal conflict, with the private sector stepping in to create small energy service providers that are now generating more than 90 percent of the electricity in the country. As a result of the in-country limited electricity infrastructure, the United Nations has relied on its own diesel generators, and it is currently one of the largest self-generators of electricity in Somalia, with an installed capacity of approximately 65 megawatts compared to the total grid-connected installed electricity generation capacity of 138 megawatts.

With the support of a MIGA guarantee, the project, developed by Kube Energy in collaboration with the government of the South West State of Somalia, and financed and further developed in partnership with Cross Boundary Energy, will establish a hybrid solar power plant in Baidoa. The power plant will have a capacity of approximately 2.8 megawatts of solar PV modules and 4.8 megawatt-hours of battery storage integrated with synchronized generators. As MIGA’s first project in Somalia, its guarantees will help the solar hybrid power plant lead to significant greenhouse gas (GHG) emissions savings, as the solar power produced will displace diesel generators that are highly polluting. The project will displace an estimated fuel usage of approximately 1 million liters per year, resulting in avoided GHG emissions of approximately 2,800 tons of CO2e per year. Furthermore, the project will help the United Nations reach its ambitious target of 80 percent renewable energy use by 2030 across all its peacekeeping missions. MIGA drew on capacity from the donor-funded Renewable Energy Catalyst Trust Fund when providing this guarantee.

Mexico’s vertically integrated electric utility, Comisión Federal de Electricidad (CFE), plays a central role in the country’s energy sector, providing electricity to 99 percent of the Mexican population. As the only provider of energy transmission and distribution services in the country, the CFE generates, transmits, and distributes electricity, and ensures affordable electricity to the poorest. As demand for electricity continues to rise, the CFE has developed an investment program geared toward expanding generation capacity as well as maintaining and improving its current power sector infrastructure.

MIGA guarantees will assist with the rehabilitation and modernization of electricity generation components within existing hydroelectric power plants that have been operating for many years but due to their age and the equipment available at the time of their commissioning are not performing optimally. Proceeds from the MIGA-covered loans will be used to support repowering and major upgrade works of seven existing hydroelectric plants owned and operated by the CFE in Mexico. The upgrades will include, depending on the site, replacement of turbines, generators, transformers, and ancillary systems that are expected to increase the hydroelectric energy generation capacity as well as extend the assets’ useful life by several decades, improve reliability, and reduce maintenance costs, with the overall effect of lowering the levelized costs of energy produced by the plants.

Given Mexico’s heavy reliance on fossil fuels for generation, the project plays an important role in the execution of the country’s sustainable agenda. In addition, the project is aligned with the World Bank Group Country Partnership Framework 2020–25 for Mexico in enabling sustainable infrastructure and supporting the government of Mexico in reaching its climate change goals. It is also aligned with MIGA’s FY21–23 Strategy and Business Outlook under its strategic direction of demonstrating leadership on the global issue of climate change.

Dependent on imported petroleum products to power its economy, St. Lucia has among the highest electricity tariffs in the world. The government of St. Lucia is working to transition to a lower-carbon economy and is undertaking initiatives to promote climate resilience and energy efficiencies, being one of the first countries in the Caribbean to modernize its entire public street lighting network.

To support this initiative, MIGA has issued guarantees that will help support the installation, operation, and servicing of a modernized street lighting network. This is MIGA’s first project in the country and an important initiative that is consistent with the government’s climate change policy, demonstrating its commitment to increase energy efficiency to reduce the country’s carbon footprint. By modernizing its public street lighting network, St. Lucia serves as a model to others in the region and is making an important step toward meeting targets submitted to the United Nations of a 16 percent reduction in GHG emissions by 2025, and a 23 percent reduction by 2030. Additionally, the installation of energy-efficient LEDs will contribute to a reduction in streetlight electricity consumption by 68.9 percent. Energy savings from the LED streetlights are estimated to be about 6.8 gigawatt-hours per year, corresponding to monetary savings of about $2.3 million per year, which will enable the government to focus on other development initiatives.