The Multilateral Investment Guarantee Agency (MIGA) is set to issue a US $5.6M guarantee to cover the risks associated with Baidoa Hybrid Solar Power Plant project in Somalia.
The project which is Kube Energy’s investments is a 2.8 MW hybrid solar power plant being constructed in Baidoa, a town in Bay province, in southwestern Somalia. The Oslo, Norway-based company partnered with investor CrossBoundary Energy to launch the project.
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Baidoa Hybrid Solar Power Plant
The plant will be connected to a 4.8 MWh battery storage system to ensure power generation after sunset or in bad weather. Kube Energy Somalia has signed a power purchase agreement (PPA) with the United Nations (UN) mission there.
The Miga guarantee is intended to cover Kube Energy’s capital and debt investments in Kube Energy Somalia for up to 15 years against the risks of expropriation, war and civil unrest. The Kube solar power plant will be capable of producing 4,000 MWh per year, electricity to power UN facilities, as well as other international organisations, government offices and utilities.
Kube Energy estimates that the hybrid solar power plant will reduce fuel consumption by approximately 1 million litres per year, avoiding greenhouse gas (GHG) emissions of approximately 2,800 tonnes of CO2 equivalent per year.
“MIGA’s risk exposure under the guarantee will be shared with the International Development Association (IDA) private sector window and the Renewable Energy Catalyst Trust Fund (RECTF) through a first loss mechanism that will spread risk and extend MIGA’s reach in fragile contexts,” said MIGA.