The Multilateral Investment Guarantee Agency (MIGA), part of World Bank Group Guarantees and the International Solar Alliance (ISA), on Friday announced the setting up of a fund to support solar projects. The MIGA-ISA Solar Facility, a multi-donor trust fund, will combine ISA's technical expertise and MIGA's capacity to mobilise financing, creating an innovative mechanism to accelerate the global adoption of solar energy, according to a statement. The facility will offer concessional financing tools, including first-loss instruments and reinsurance capacity, to improve project bankability and lower the cost of MIGA guarantees. Initially, the facility will focus on supporting Sub-Saharan Africa, with plans to expand globally, the statement said.

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Administered by MIGA, the facility will help scale up its guarantee issuance, mobilising private capital for solar and distributed energy projects. It will also provide cost-effective risk mitigation instruments to support the growth of solar projects in ISA member countries. ISA has committed a seed funding of USD 2 million, with a target to raise USD 10 million for the facility. This is the first programme under the guarantee component of ISA's Global Solar Facility (GSF), which will have a target size of USD 200 million for Africa.

Additionally, both MIGA and ISA will support each other in launching new solar power and distributed energy projects in eligible developing countries." ISA is excited to collaborate with MIGA for providing cost-effective guarantee solutions for decentralised solar projects in Africa," said Ajay Mathur, Director General, ISA. Hiroshi Matano, Executive Vice President, MIGA said in the statement: "MIGA is excited to host the MIGA-ISA Solar Facility and support Sub-Saharan Africa in accessing reliable and clean electricity."

The facility will attract private investment by providing risk mitigation and concessional financing, and lower costs and close the energy gap in underserved regions, Matano stated. ISA and MIGA have previously collaborated on a solar project in the Democratic Republic of Congo, where MIGA guarantees and ISA financing are expected to reduce operating costs by approximately 20 per cent, resulting in lower tariffs for customers. It said that 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 the African Development Bank Group are partnering on an ambitious effort to provide at least 300 million people in Africa with electricity access by 2030.