On June 30, 2021 MIGA issued guarantees totaling $4.5 million to GreenYellow S.A.S. of France to cover its equity and quasi-equity investments in Société de Production d’Energie Solaire de Ouagadougou SAS of Burkina Faso. The guarantees have a term of up to 20 years, providing coverage against the risk of transfer restriction and war and civil disturbance. On June 30, 2022, the guarantees were extended to include coverage against the risk of expropriation and breach of contract.
Moreover, on May 24, 2024, Miga assigned the contract of guarantee from Green Yellow S.A.S. of France to a subsidiary of Axian Energy, specifically Axian Energy Green Ltd. of Mauritius.
The project entails construction, ownership, operation and maintenance of a 30 MWp solar PV plant and interconnection facilities. The Project is located in the municipality of Nagréongo, in the province of Oubritenga in the Plateau-Central region of Burkina Faso. The electricity output will be sold to Société Nationale d’Electricite du Burkina Faso (“SONABEL”), the state-owned utility under a 25-year Power Purchase Agreement. A Public Private Partnership agreement has also been signed with the Government of Burkina Faso for a tenor of 25 years.
The Project is part of the first Independent Power Producers in the country and will bring much-needed clean power to Burkina Faso. As such, the Project has the potential to demonstrate the viability of private investment in the country’s solar power sector, while strengthening the regulatory environment for IPPs. Moreover, the Project has the potential to diversify Burkina Faso’s energy mix, decrease its dependency on less environmentally friendly fossil fuels, and generate cost savings to consumers and the government. The support for the Project aligns with MIGA’s strategic focus on International Development Association (“IDA”) member countries, fragility and conflict-affected countries, and projects with climate benefits.
MIGA’s risk exposure under the guarantee is shared with the IDA Private Sector Window (“PSW”). For more information on the IDA18 PSW, please access the IDA18 Private Sector Window website. The PSW involvement is via a shared first loss facility that assists 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 0.5% of the total project cost over the envisaged 20-year guarantee period.
