Facebook and Microsoft have joined with investment firm Allotrope Partners to launch a “first-of-its-kind” finance facility to catalyze investments in renewable energy microgrids in underserved communities around the globe.
The Microgrid Investment Accelerator (MIA) will mobilize roughly $50 million between 2018 and 2020 to expand energy access in parts of India, Indonesia and East Africa. The facility was launched yesterday at the U.N. Sustainable Energy For All Forum.
“MIA will test the commercial opportunity for microgrids and demonstrate how concessionary finance can unlock progressively larger proportions of private capital as risks are discovered, priced and mitigated,” said Alexia Kelly, CEO of the new MIA facility, in a statement.
Access to affordable financing has been a major barrier to the deployment of microgrid solutions, particularly in frontier markets. A handful of startups have been forging ahead, but with limited funds and relatively small projects.
The MIA plans to accelerate the microgrid market through an “ecosystem approach to finance” that leverages grants and loans from foundations and development institutions to attract private-sector capital. “MIA will directly deploy risk-tolerant project and corporate debt and equity, both independently and with co-investment partners,” according to a statement. Rigorous data collection and analysis will help to prove the commercial business case for microgrid investments and findings will be made public to inform the broader investment community.
Founding partners Facebook, Microsoft and California-based Allotrope have joined with more than a dozen implementing partners and observers to form the MIA. Other participants include cKers Finance in India, CrossBoundary Energy in Africa, California Clean Energy Fund (CalCEF), Electric Capital Management, Morrison & Foerster LLP and GivePower. The MIA is expected to accept pilot project applications in the third quarter of this year, and to begin distributing funds to selected projects next year. Source: https://www.greentechmedia.com/articles/read/facebook-microsoft-mobilize-50-million-for-renewable-energy-microgrids