London: Facebook Inc., Microsoft Corp. and venture capitalists at Allotrope Partners set up a facility to finance energy access projects in Indonesia, India and East Africa.
The Microgrid Investment Accelerator, or MIA, will seek to mobilize $50 million from 2018 to 2020, according to an emailed statement. It will tap grants and loans from foundations and development banks to attract private capital into projects that help to transmit renewable energy over small electricity networks.
“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," chief executive officer Alexia Kelly said.
A microgrid is a miniature power system that operates independently of a national grid. The International Energy Agency estimates that more than 1.2 billion people don’t have access to electricity, mostly in Sub-Saharan Africa and developing Asia. As renewable energy technologies such as solar panels become cheaper, microgrids have emerged as an option to more people.
Helping provide energy access is a method to tie corporate social responsibility together with business development at companies peddling electronic services and devices. Providing power to people off the grid could eventually open up large new markets for computers and social networks.
MIA has signed up more than a dozen implementing partners and observers. It will start to request plans for pilot projects from in the third quarter this year and expects to begin disbursing funds in 2018.
“The Microgrid Investment Accelerator will not only be a powerful tool in driving much-needed capital into projects, but will also help to bring down costs, build a stronger ecosystem, and catalyze innovation," said Microsoft’s Kevin Connolly, the director of energy affordable energy access initiatives at the software company. Bloomberg