Making the Market

Improved access to modern energy services is one of the fastest ways to drive socioeconomic development and poverty alleviation. In many markets, electrification has largely been the domain of governments, but the rise of affordable, clean distributed generation technologies is opening new opportunities for the private sector and for public-private partnerships. Renewable energy (RE) microgrids will play a critical role in meeting the household and productive needs of the 1.1 billion people that currently lack affordable, reliable electricity across the globe.  

As with most early-stage industries, key barriers to scaling investment in microgrids include: the lack of affordable and accessible capital, unproven business models, and poor market data, among others. Private sector investors see clean energy microgrids for access as a high-risk endeavor and have been reluctant to mobilize capital into this important sector. Capital is flowing much more slowly than the pace that is required to meet ambitious electrification and climate change mitigation targets.

The Microgrid Investment Accelerator (MIA) is a first-of-its-kind energy access financing facility designed to address these challenges. MIA seeks to mobilize ~$50 million between 2018-2020 to expand clean energy microgrids to communities in India, Indonesia, and East Africa. Supporting organizations include founding partners Allotrope Partners, Facebook and Microsoft, and implementing partners cKers Finance in India, CrossBoundary Energy in Africa, California Clean Energy Fund (CalCEF), Electric Capital Management, Morrison & Foerster LLP, and GivePower.

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. The MIA Facility will open important doors for U.S. businesses, family offices and entrepreneurs seeking access to new markets and investment opportunities by de-risking private sector investment into microgrids in target emerging markets.

As part of the facility design process, a high-level Advisory Committee was convened with experts and practitioners from across the globe, who have contributed their perspective and expertise.  MIA will issue its first solicitation to developers for pilot projects in 2017, with the facility disbursing funds at scale in 2018.