Project description
On November 9, 2023, The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, issued a guarantee totaling $50.3 million to CES AC1 Limited of Mauritius, a subsidiary of Congo Energy Solutions Limited (CESL), for its equity and quasi-equity investment into Nuru SASU, a DRC-based company in charge of the construction, operation, maintenance, expansion, and modernization of multiple solar-hybrid metro-grid sites in the Democratic Republic of Congo (DRC), an IDA and FCS country. The MIGA guarantee covers Expropriation, Transfer Restriction and Inconvertibility and War and Civil Disturbance risks for a period of up to 15 years.
CESL’s investments consists of (i) the refinancing of a 1.3 megawatt (MW) existing metro-grid in Goma in North Kivu province (Goma 1); (ii) the development and construction of additional 3.7MW-capacity solar-hybrid metro-grid in Goma in North Kivu province (Goma 2), (iii) the development and construction of a 2 MW solar-hybrid metro-grid in Kindu in Maniema province (Kindu); (iv) the development and construction of a 8 MW solar-hybrid metro-grid in Bunia in Ituri province (Bunia), all in the Democratic Republic of Congo (the Project). With an electrification rate of 19%, DRC has the second highest number of people without access to electricity globally. CESL plans to expand its operations across DRC to provide energy to up to 5 million people by 2025.
MIGA’s risk exposure under the guarantee is proposed to be shared with the IDA Private Sector Window (PSW). The PSW involvement will be via a shared first loss facility as well as through risk-sharing akin to reinsurance to address the shortage of private reinsurance in the market. These will assist in spreading the risk and result in a reduced cost of the guarantee for the project enterprise. The project meets the minimum concessionality principle and the amount of subsidy is estimated to be less than 3.6% of the total project cost over the envisaged 15-year guarantee period. MIGA’s risk exposure is also shared with the Renewable Energy Catalyst Trust Fund.
Environmental Categorization
The Project is Category B under MIGA’s Policy on Environmental and Social Sustainability (2013). To view ESRS please Click here.
Development Impact
The Project will contribute to increased access to electricity in fragile parts of DRC, primarily by improving electricity access for Commercial & Industrial, small and medium-sized enterprises (SME) and residential customers, who currently have no or unreliable access to electricity. The Project is expected to have positive environmental effects from displacing diesel gensets with a greener source of energy, thereby reducing greenhouse gas (GHG) emissions by an estimated 9,458 tons of carbon dioxide equivalent (tCO2eq) emissions per year. The Project will demonstrate the commercial viability of solar hybrid mini-grids in DRC as a green and reliable source of electricity in areas that are not served or underserved by the national utility, and demonstrate the effectiveness of the associated regulatory framework, thus increasing private participation in this sector.
