CrossBoundary Energy Access Raised $25 Million to Finance Solar-Powered Mini-Grids In Africa

Africa’s first project financing facility for mini-grids, CrossBoundary Energy Access(CBEA) announces $25 million in new funding commitments ARCH Emerging Markets Partners Limited, Bank of America and Microsoft Climate Innovation Fund. This investment will leverage an additional $25 million in senior debt to deploy $50 million of capital into CBEA’s near-term pipeline of solar powered mini-grids.

CBEA will spend $150 million over two years to bring clean electricity to one million people in Africa.  Mini-grids are made up of solar and batteries and provide grid-quality power for both homes and businesses. This initiative will allow individual small- and medium-sized business subscribers to have access to renewable electricity. These solar-powered mini-grids will bridge the gap and bring clean electricity into rural Africa.

According to the International Energy Agency (IEA), $187 billion will be needed to ensure universal access to solar energy by 2030. CBEA believes that project finance is crucial to unlock the long-term infrastructure capital the mini-grid sector requires. CBEA pioneered the hybrid project finance structure in 2019 using funding from Rockefeller Foundation (Ceniarth), DOEN Foundation, Shell Foundation, UK Aid and Shell Foundation.

According to the IEA more than 600 millions people in Africa don’t have electricity. This hinders economic growth and productivity as well as job creation and poverty reduction. The solution is solar mini-grids. They unlock the potential for those who are still without electricity. CBEA’s blended finance approach creates a new model for funding rural electrification in Africa, bringing renewable electricity to one million people once the target $150 million is fully deployed.

Gabriel Davies, Head of Energy Access at CrossBoundary and Managing Director, says, “CrossBoundary Energy Access has grown up with the sector and this fundraise is a testament to the work of the developers, governments, and donors over the last few years. Microsoft, Bank of America, ARCH and Bank of America have expressed confidence in the sector’s ability to attract institutional capital. Our investors are confident that the minigrid sector will scale, and that 2022 is a pivotal year in its growth. There is still much to be done on all aspects of mini-grids, including regulation, business model, subsidy programs, and regulations. But we’re excited by the step change in scale and pace that we’re seeing from developers, investors, regulators, and donors, and we’re encouraged by the amount of capital the sector is prepared to absorb in the next 24 months.”

Humphrey Wireko is the Managing Director of CrossBoundary Energy Access, says, “This is a crucial step for CrossBoundary Energy Access towards unlocking the private and public capital needed to scale the mini-grid sector. We look forward to mobilizing this investment to bring the projects in our pipeline to life, and providing power to African homes and businesses through these distributed renewable assets.”

William Barry, Managing Director, ARCH Emerging Markets Partners Limited’s Africa Renewable Power Fund (ARCH ARPF), says, “We believe that distributed renewables, including mini-grids, are a critical component of Africa’s energy future, and CrossBoundary Energy Access has developed a thoughtful, blended approach to the challenge of unlocking capital for the sector. ARCH ARPF is a company that partners with strong management teams to invest in scalable models that provide compelling alternatives for their customers. We are excited to support them to scale.”

Amy Brusiloff, Community Development executive at Bank of America for Environmental, Social and Governance, says, “Through this investment, Bank of America is supporting clean energy solutions in rural, hard to reach areas of Africa and helping to drive the transition to clean energy for all. This innovative blended finance structure by CrossBoundary Energy Access aggregates renewable energy mini-grid projects to achieve scale and reduce risk, which more readily enables large institutions to invest.”

Brandon Middaugh, Director, Microsoft Climate Innovation Fund, says, “Reaching universal electrification in Africa requires scaling affordable and clean energy solutions. CrossBoundary Energy Access’s innovative approach to mini-grids unlocks clean energy solutions for the millions of Africans who still lack access to power. Microsoft is proud to help scale mini-grid solutions that advance climate equity by providing clean energy access to more businesses and communities.”

Bowmans Kenya advised ARCH Emerging Markets Partners Limited. The lenders were advised by Latham & Watkins.

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