CrossBoundary Raises $25m to Finance Solar-Powered Minigrids in Africa

CrossBoundary Energy Access – (CBEA) the African project financing facility for mini-grids new funding commitments of $25 million from ARCH Emerging Markets Partners Limited (Bank of America) and Microsoft Climate Innovation Fund have been announced by.

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.

CrossBoundary will invest $150 million in the next two-years to provide clean energy for one million Africans.  Mini-grids are made up of solar and batteries and provide grid-quality power for both homes and businesses. Individual small- and large-business subscribers will be able to get renewable electricity for the first times through this initiative. These mini-grids powered by solar energy will bring clean electricity to rural Africa.

According to the International Energy Agency, $187 billion is needed for universal energy access by 2030.

CrossBoundary believes in project finance as a key to unlocking long-term, infrastructure-type capital for the minigrid sector. CrossBoundary was the first to pioneer a hybrid project finance structure, which received funding from Rockefeller Foundation Ceniarth Foundation, Shell Foundation, 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 prevents economic growth, productive investments, 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 of $150 million is fully deployed.

Gabriel Davies, Managing Director and Head of Energy Access at CrossBoundary, says, “CrossBoundary Energy Access has grown up with the sector and this fundraising 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 all have confidence in the sector’s ability to attract institutional capital.

“Our investors believe the mini-grid sector is ready to scale and that 2022 will mark an inflection point 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. We’re also encouraged by the amount of capital the sector is prepared to absorb in the next 24 months.”

Humphrey Wireko, Managing Director, 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 high-performing management teams to invest in scalable business models that provide compelling alternatives for their customers. We are excited to support them to scale.”

Amy Brusiloff, Community Development executive for Environmental, Social and Governance, at Bank of America, 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.”

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