MIGA and ISA to Establish Trust Fund to Support Solar Projects
WASHINGTON, September 05, 2024 – 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.
About ISA
ISA is a global treaty-based organization with 118 member countries which has been launched through an innovative partnership between the governments of India and France. The ISA is an action-oriented, member-driven, collaborative platform for increased deployment of solar energy technologies as a means for bringing energy access, ensuring energy security, and accompanying its member countries to lead their own energy transition autonomously. ISA is rolling out a Global Solar Facility (GSF) to provide cost effective financing solutions which are otherwise not available in the market to help accelerate deployment of distributed solar projects to all the regions, starting with Africa. The Africa Facility is targeted at $200 million, comprising of guarantee, insurance and investment components.
Stay updated and follow ISA at and https://x.com/isolaralliance and
About World Bank Group Guarantees
Initiated in 2024, World Bank Group Guarantees consolidates all guarantee products and experts from across the World Bank Group institutions at MIGA. It provides a simplified and comprehensive menu of guarantee solutions, enabling clients to select the instrument that best suits their needs. The platform streamlines processes, removes redundancies, and provides greater accessibility by de-risking investments in developing countries. Its goal is to boost the WBG’s annual guarantee issuance to $20 billion by 2030.
For more information about the guarantee platform, please visit: https://www.worldbank.org/wbgguarantees
Stay updated and follow us at https://twitter.com/MIGA and https://www.linkedin.com/company/wb-miga
Contact:
In Washington: Elizabeth Howton, (202) 458-5922 or ehowton@worldbankgroup.org