Microsoft and Facebook collaborated with Allotrope Partners to invest in the first-ever finance facility to boost investments in renewable energy microgrids, especially in underserved regions across the world.
Called the Microgrid Investment Accelerator, the facility is created to mobilize around $50 million between 2018 and 2020 to improve energy access in some areas in Indonesia, India, and East Africa. Alexia Kelly, the CEO of the new facility, said:
“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 facility will boost the microgrid market by using an “ecosystem” approach to financing, which means that it will leverage loans and grants from development institutions and foundations to attract capital from the private sector. With the raised funds, it will provide affected communities with access to renewable energy microgrids, as well as essential health, social, and economic benefits.
In an email, a spokesperson from Facebook wrote:
“Facebook’s mission is to connect the world, and we’re exploring different ways to engage with partners to support energy-efficient systems that drive sustainable connectivity — including our support of the Microgrid Investment Accelerator to help spur investment in affordable and clean distributed generation. Ultimately, we anticipate these types of partnerships will assist in broadening access to our connectivity efforts.”
To complete the facility, the three founding companies also employed several implementing partners and observers, including cKers Finance in India, California Clean Energy Fund (CalCEF), and CrossBoundary Energy in Africa.
The facility is said to start its pilot project in the third quarter of this year and begin funding selected projects in 2018.