Private sector involvement in climate action is key to closing the climate finance gap, which by some estimates ranges in trillions of dollars. MIGA's ability to mobilize private capital is essential for unlocking private sector potential for addressing climate finance needs in developing countries.
No one is more disproportionately affected by the risks and impacts of climate change than those in the least developed countries and emerging economies. Development inequality exacerbates the impacts of climate change on the poorest, and in the next two decades, 143 million people could be internally displaced due to changing weather patterns, droughts, desertification, food insecurity, and other susceptibilities attributed to the adverse effects of climate change.
MIGA has made climate change a priority area of its strategy along with low-income (IDA) countries and fragile and conflict-affected situations (FCS), and has sought to implement the commitments made in the World Bank Group Climate Change Action Plan. From FY14 to FY20, MIGA projects have reduced greenhouse gas (GHG) emissions by 10.4 million tons in CO2 equivalent (CO2e) per year, and the projects in the Agency's portfolio supporting climate change adaptation and mitigation grew from $3.7 billion at end-FY15 to $5.6 billion at end-FY20.
In FY20, MIGA's support of climate finance projects continued to be strong with guarantees issued in 11 countries and in support of 20 projects (43% of total projects supported) for a total amount of $823 million. This included six solar power projects in Egypt, two in Senegal and two in South Africa. MIGA also issued guarantees in support of hydropower projects in Nepal and the Solomon Islands, with the latter being the Agency's first transaction in the country. Other projects supported included two wind power projects in South Africa and one in Djibouti, a fertilizer project in Bangladesh, a waste-to-energy project in Serbia and three finance sector projects in Kenya, Mauritius and Uruguay.
Examples of MIGA-Supported Projects Related to Climate Change
In September 2018, MIGA issued a guarantee of US$149.80 million in support of the construction of the first wind farm in Senegal. The Taiba N’Diaye wind farm will be made up of 46 turbines and provide 450,000 MWh of electricity per year to 2 million people, as well as save over 300,000 tons of CO2e annually.
In September 2019, MIGA and IFC, members of the World Bank Group, provided a €259.57 million financing and guarantees package to Beo Čista Energija d.o.o. for a landmark waste-to-energy project in Belgrade that will clean up one of Europe’s largest uncontrolled landfills and construct a new, sustainable waste-management complex to help reduce pollution and mitigate climate change.