New Delhi: The Multilateral Investment Guarantee Agency (MIGA) and the International Solar Alliance (ISA) have announced the creation of a multi-donor trust fund aimed at enhancing and reducing the costs associated with solar power projects globally. The new initiative, known as the MIGA-ISA Solar Facility, will initially target Sub-Saharan Africa, with plans to expand its reach over time.

This facility emerged from a collaborative effort, catalyzed by the Indian government, to advance the global adoption of renewable energy. By combining ISA’s technical expertise with MIGA’s financial mobilization capabilities, the facility will introduce innovative mechanisms to accelerate solar energy projects. It will provide concessional financing tools, such as first-loss instruments and reinsurance, to enhance project viability and reduce the cost of guarantees.

The MIGA-ISA Solar Facility will focus on launching solar and distributed energy projects in eligible developing countries. "This initiative is crucial for achieving the goal of 300 million new electricity connections in Sub-Saharan Africa by 2030," said a MIGA representative.

Administered by MIGA, the facility will scale up guarantee issuances and attract private capital for solar projects. With an initial commitment of $2 million from ISA, the aim is to raise a total of $10 million. This facility is the first program under ISA’s Global Solar Facility (GSF), which targets raising $200 million for solar projects in Africa.

Hiroshi Matano, MIGA's executive vice president, expressed enthusiasm about the initiative, stating, “MIGA is thrilled to host the MIGA-ISA Solar Facility and support Sub-Saharan Africa in accessing clean and reliable electricity. By providing risk mitigation and concessional financing, this facility will help lower costs and bridge the energy gap in underserved areas.”

ISA director general Ajay Mathur highlighted the significance of this milestone, noting, “This is a key step in rolling out ISA’s GSF. We are excited to deliver clean energy to millions of Africans who remain off the grid.”

To mark the launch of the facility, a solar project has been completed in the Democratic Republic of Congo, where MIGA guarantees and ISA financing are expected to reduce operating costs by approximately 20%, leading to lower tariffs for consumers.

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