Posted on :Wednesday , 22nd June 2022
Kenya-based CrossBoundary Energy Access (CBEA), a mini-grid infrastructure investor, has raised US$25 million from ARCH Emerging Markets Partners Limited, Bank of America and Microsoft Climate Innovation Fund to back renewable energy projects across the continent.
In this round, ARCH made a US$10 million equity investment as Microsoft and Bank of America injected US$15 million mezzanine financing â€” a debt that can be turned into equity.
The CBEA, a subsidiary of the investment group CrossBoundary, said in a statement that the new funding will unlock an additional US$25 million in senior debt, helping it secure capital to the tune of US$50 million, which will also be used to finance near-term solar-powered mini-grids.
The CBEA, which was set up in 2019 with the initial backing of the Rockefeller Foundation, Ceniarth, DOEN Foundation, Shell Foundation and UK Aid, plans to inject US$150 million in solar projects over the next 2 years.
As a financier, commercial owner and operator of mini-grids, the CBEA has helped households and businesses access clean energy in multiple countries across Africa.
CrossBoundary Energy Access Managing Director Humphrey Wireko said, â€œThis 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.â€
The CBEA has worked with a number of solar companies in Nigeria, Kenya, Ghana and Rwanda, including Topec, SolarAfrica, PowerGen, Centennial, solarcentury and soventix to deploy multiple solar mini-grids.
Sub-Saharan Africa accounts for 75% of the worldâ€™s population with no access to electricity. Countries like South Sudan, Burundi, Chad, Malawi, Burkina Faso, Madagascar and Tanzania are among some of the least electrified countries in the world, and could benefit from clean energy from solar or wind.
According to the World Bank, mini-grids have the potential to provide half a billion people with clean energy by the end of this decade with the right policies in place. Mini-grids also provide cleaner and cheaper alternatives of energy.
Commenting about the deal, William Barry, the managing director of ARCH Emerging Markets Partners Limitedâ€™s Africa Renewable Power Fund (ARCH ARRF), said: â€œWe believe that distributed renewables, including mini-grids, are a critical component of Africaâ€™s energy future, and CrossBoundary Energy Access has developed a thoughtful, blended approach to the challenge of unlocking capital for the sector. At ARCH ARPF, we aim to partner with strong management teams and invest in scalable business models that offer compelling alternatives to their customers. We are excited to support them to scale.â€