ARCH, BofA, Microsoft fund back CrossBoundary’s Africa mini-grid finance unit

 ARCH, BofA, Microsoft fund back CrossBoundary’s Africa mini-grid finance unit

CrossBoundary Energy Access (CBEA), Africa’s first project financing facility for mini-grids, has secured $25 million in new funding commitments from ARCH Emerging Markets Partners, 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 said it will deploy a total of $150 million over the next two years to bring clean energy to one million people in Africa. The mini-grids combine solar and batteries to provide 24/7 grid-quality power to households and businesses. CBEA is a direct investment platform of the CrossBoundary Group.

William Barry, Managing Director at ARCH’s Africa Renewable Power Fund, said: “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.”

According to the International Energy Agency (IEA), the solar mini-grid sector needs $187 billion to achieve universal energy access by 2030. According to the IEA, more than 600 million people in Africa do not have access to electricity. Solar mini-grids provide a solution to this issue, unlocking the potential of those living 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.

CBEA first pioneered its blended project finance structure in 2019 with funding from Rockefeller Foundation, Ceniarth, DOEN Foundation, Shell Foundation and UK Aid.

Gabriel Davies, Managing Director and Head of Energy Access at CrossBoundary, says, “Confidence from ARCH, Bank of America, and Microsoft, reflects the growing maturity of both the mini-grid sector, and its 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.”

CrossBoundary Advisory was founded in 2011 and provides a broad spectrum of investment and transaction advisory services across a range of sectors in underserved markets globally. CrossBoundary Energy was launched in 2015 and is sub-Saharan Africa’s leading provider of renewable energy services to commercial and industrial businesses.

The group had also launched CrossBoundary Educational Infrastructure as an investment platform that seeks to provide affordable student housing and related infrastructure in East Africa.

ARCH was advised by Bowmans Kenya. The lenders were advised by Latham & Watkins.

Vivek Sinha

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