MIGA issues guarantees for solar-plus-storage hybrid in Somalia

The Multilateral Investment Guarantee Agency (MIGA), part of the World Bank Group, said that it has provided guarantees of USD 5.67 million (EUR 5.3m) in support of a solar-plus-storage project in Somalia.

The project was developed by Norwegian renewables firm Kube Energy in collaboration with the government of the South West State of Somalia, and financed and further developed in partnership with Africa-focused CrossBoundary Energy, MIGA said.

The team will build a solar PV farm of around 2.8 MW with 4.8 MWh of battery storage integrated with synchronised diesel generators. The site is located in the city of Baidoa, a regional trading hub with a growing population of people displaced due to conflict and drought.

MIGA said that its guarantee will cover Kube Energy’s equity and debt investments in Kube Energy Somalia LLC for a period of up to 15 years against the risks of expropriation and war and civil disturbance.

At first, the hybrid solar system will serve the United Nations compound in Baidoa under a power purchase agreement (PPA) with Kube Energy. The project could potentially be further supported through PPAs with other international organisations, government offices and public services, and there is also potential to expand the plant’s capacity to power communities across the city through a local utility, MIGA said.

According to the agency, Somalia has an estimated electrification rate of around 35% and the total installed grid-connected generation capacity of 138 MW. As it stands, the UN is one of the largest self-generators in the country, having some 65 MW of own diesel generators. The new solar-based hybrid system will enable the organisation to cut diesel consumption and support the development of local energy infrastructure as much of it was destroyed in Somalia’s internal conflict.

The project is MIGA's first in Somalia. The power plant will be in commercial operation for 15 years, after which the ownership will be transferred to local authorities.

(USD 1.0 = EUR 1.079)

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