
C&I and Grid-Edge Innovations
MIGA’s guarantees also support investment in other distributed energy business, such as renewable energy solutions targeting commercial and industrial (C&I) customers, helping to decarbonize their energy supply, together with improvements in the quality, reliability, and affordability of power supply.
The World Bank Group’s guarantees help build investor confidence to implement new business models in an evolving energy regulatory environment, complementing the host country’s ambitious strategy to decentralize and modernize their energy systems through wheeling, energy trading, and captive power solutions.
MIGA has recently issued guarantees to Konexa, Kube Energy, and Escotel to support investment in the implementation of their innovative business models.
Nigeria
Boosting first private renewable energy trading platform in the country
On February 23, 2024, MIGA issued a guarantee of $16.29 million to Konexa Power Holdings PCC of Mauritius for its investments in Konexa Solar 1 Ltd. in Nigeria. The guarantee covers the risks of expropriation, war and civil disturbance, including temporary business interruption, for up to 20 years.
This is the first private renewable electricity trading platform in the country. The project will help accelerate the Nigerian Breweries’ transition to reliable sources of renewable energy.
The project supports the decarbonization of industrial customers with highly reliable renewable energy sources through the installation of an energy storage system, distribution system upgrades, and interconnection of a new source of hydropower to be wheeled through the national grid. The project leverages foreign direct investment in support of an innovative approach to catalyzing renewable energy in Nigeria while displacing private sources of fossil-fuel-based power generation.
Somalia
MIGA’s ground-breaking first solar project in the country
In January 2023, MIGA issued a guarantee of $5.67 million to cover Kube Energy and CrossBoundary Energy’s investment for a period of up to 15 years against risks that the project would be expropriated or damaged or destroyed by war or civil disturbance. The solar hybrid power plant with a capacity of approximately 2.8 megawatts marks a pivotal step in decarbonizing the United Nations operations in fragile and conflict-affected situations.
Foreign direct investment has been limited due to the fragile and conflict-affected context of Somalia, which was originally perceived as too risky for the project to proceed.
Somalia is not unique. Up to two-thirds of the world’s extreme poor will live in conflict-affected situations by 2030, according to the World Bank. Private investments in fragile and conflict-affected contexts have not grown fast enough to meet World Bank Group targets, in part because insecurity, lack of infrastructure, weak governance, and lack of access to finance and land often deter private investors and constrain the pipeline of bankable projects in these countries.
The project will be a permanent part of Somalia’s energy infrastructure, initially serving a limited number of off-takers, including the United Nations, with plans to expand access to clean, affordable power for local government, businesses, and residents. It will reduce greenhouse gas emissions, improving environmental quality in a region severely impacted by climate change.
The MIGA guarantee was a prerequisite for the investors’ participation in the solar plant, and its issuance instilled the investor confidence necessary for the project to proceed.
Sierra Leone and Liberia
Better cell service with fewer emissions
In 2021, MIGA issued guarantees of up to $25.6 million to Escotel Mauritius covering its investments in solar power generation in Sierra Leone and Liberia, protecting investments the risks of Transfer Restriction, Expropriation, and War and Civil Disturbance.
Cell towers often rely on an old, dirty device for power: the diesel generator. MIGA is helping them go green by backing investment in solar power, by mitigating certain risks that create barriers to raising capital.
MIGA’s guarantees support the provision of solar-based electricity and logistical services to power existing and future cell phone towers in Sierra Leone and Liberia. The Escotel projects provides power through considerably more efficient and climate-friendly power solutions by installing photovoltaic solar panels at each telecom tower, either supplementing or replacing entirely the diesel generators. This allows the telecommunication operator to modernize and expand the scope and quality of its services, while improving the reliability of power supply, lowering operational costs, and reducing the reliance on expensive diesel generators.
MIGA’s guarantees shielded investors from non-commercial risks. Without this coverage, the investment would have been far too risky to proceed.