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FACEBOOK and Microsoft Corp. are venturing into eco-tech in 2018 by setting up the Microgrid Investment Accelerator (MIA) in partnership with venture capitalists Allotrope Partners.
The consortium partners will work together to disburse funds to innovators of “microgrids”, which can transmit renewable energy over small electricity networks.
The MIA plans to source and mobilize around US$50 million to fund infrastructure projects in Indonesia, India and East Africa in a bid to produce clean energy en masse and, more importantly, to supply it to consumers in poor, rural communities.
The scheme is expected to begin disbursing funds from 2018 and will keep running through 2020. The program will seek financing from various grants and engage loans from foundations and developments banks, which will, hopefully, act as a draw to private funders.
“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 independent of the national grid, which can be disconnected and operated autonomously, putting control into the hands of local communities.
This is particularly important in the selected countries, where an estimated 1.2 billion or more do not have access to electricity, particularly so in Sub-Saharan Africa and underdeveloped parts of Indonesia and India.
Dependence on the larger grid system puts communities at the mercy of a lumbering bureaucracy and, in some cases, manipulation by political forces. Microgrids would free communities to take their own energy needs into their hands.
Furthermore, as renewable energy technologies such as solar panels and wind turbines become cheaper, microgrids have become ever more viable. Communities can take advantage of their natural surroundings to harness renewable energy, such as hydropower or thermal energy.
MIA could possibly even help foster a nascent eco-tech industry in these economies by providing jobs and training. Manufacturers of microgrid components or maintenance services would find a whole new market open to them, making corporate social responsibility an essential part of business development rather than pitting socialist and capitalist sentiments against each other.