MIGA Supports Rwanda’s First Interconnected Grid Project
WASHINGTON, June 13, 2024 –The Multilateral Investment Guarantee Agency of the World Bank Group (MIGA) has issued guarantees of $9 million to Oikocredit, Ecumenical Development Cooperative Society U.A., Triodos Groenfonds and Triodos Emerging Markets Renewable Energy Fund for their investments in ARC Power Rwanda Ltd. of Rwanda, a subsidiary of Arc Power Ltd., UK. The guarantees will protect against the risk of breach of contract for up to eight years.
The project will be the country’s first interconnected grid network, with solar generation units installed within village networks. These units will each directly serve 25 to 30 users, including schools, health centers, local government offices, small and medium enterprises, commercial centers, and business parks, and households within the villages. The project is expected to connect approximately 30,000 new customers living in 150 villages to the Rwandan national grid for the first time, benefitting around 118,000 people.
The project has launched a clean cooking program, enrolling influential women leaders as ambassadors to facilitate the adoption of the electric cooking technology among other women in the community.
"MIGA’s guarantee will support Rwanda toward its ambitious goal of achieving universal energy access by the end of 2024," said Hiroshi Matano, MIGA Executive Vice President. "Access to reliable and affordable energy is a fundamental catalyst for sustainable economic growth.”
Instead of a stand-alone mini-grid system, ARC Power is constructing the transmission and distribution infrastructure, which will connect their generation facilities to users. Among ARC Power’s assets, the transmission and distribution assets to be interconnected to the national grid will be transferred to the national utility upon completion for an agreed price. The solar generation units will be owned by ARC Power and will directly serve the village productive users.
The project will provide village households with a more sustainable and affordable energy source by matching the end-user electricity tariffs with the national grid tariffs. This approach is significantly cheaper than tariffs under a captive mini-grid system with battery storage units.
“We are proud to work with MIGA, Triodos, and ARC Power in bringing interconnected solar energy to more small and medium enterprises, community organizations and households in Rwanda," said Alexander Remy, Equity Officer Renewable Energy at Oikocredit. “Increased access to clean, sustainable energy helps people improve their living standards and empowers them with opportunities for income-generating activities.”
“ARC Power's innovative hybrid model, providing both off-grid and on-grid clean energy solutions, offering clean and affordable solar energy to Rwandan households and businesses and aligns perfectly with our clear and ambitious impact goals. As such, the company is a great addition to our portfolio,” said Marius Groenenberg, Principal Investment Manager at Triodos Investment Management.
Rwanda has ambitious plans for universal energy access, aiming to provide electricity to 100 percent of the population by the end of 2024. The energy access rate in Rwanda currently stands at 72 percent. Over the last decade, the country has made significant progress in improving access to electricity through both grid extension and off-grid initiatives. Urban areas currently have nearly 100 percent access. As of 2021, rural households with access to electricity reached 38 percent, according to the World Bank.
About Oikocredit, Ecumenical Development Cooperative Society U.A. of the Netherlands
Social impact investor and worldwide cooperative Oikocredit has nearly five decades of experience funding organisations active in financial inclusion, agriculture, and renewable energy.
Oikocredit's loans, equity investments and capacity building aim to enable people on low incomes in Africa, Asia, and Latin America to improve their living standards sustainably.
Oikocredit finances more than 500 partners, with total development financing capital outstanding of €1,084.7 million (in December 2023). For more information, visit www.oikocredit.coop. For more information about Oikocredit or to request an interview, please contact: Viviana Cordero, Communications Business Partner, Oikocredit International, telephone: +31 33 422 4040, email: vcordero@oikocredit.org.
About Triodos Groenfonds and Triodos Emerging Markets Renewable Energy Fund
Triodos Groenfonds is the oldest green investment fund in the Netherlands and invests primarily in loans to green projects that are recognised as such by the Dutch government. The fund focuses on renewable energy, organic farming, nature and landscape development and sustainable construction.
Triodos Emerging Markets Renewable Energy Fund
The Fund invests in the much-needed energy transition in emerging markets by providing long-term senior debt to utility-scale wind, solar and run-of-the-river hydro projects. The fund also finances commercial and industrial initiatives and innovative projects that reach individuals, such as mini grids. The fund is a sub-fund of Triodos SICAV II.
Both funds are managed by Triodos Investment Management.
For more information, please visit www.triodos-im.com
About MIGA
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping to mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war and civil disturbance; and offering credit enhancement to private investors and lenders. Since its creation, MIGA has issued over $81 billion in guarantees across 123 developing countries, supporting more than 1,000 projects. Over the past decade, MIGA’s guarantees have helped provide new or improved electricity services to more than 78 million people.
For more information, please visit: https://www.miga.org
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