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CrossBoundary Energy Access (CBEA), the Nairobi-based project finance facility for mini-grids, has raised US$25 million from ARCH Emerging Markets Partners, Bank of America, and Microsoft Climate Innovation Fund to back solar energy projects across Africa.
The new investment will leverage an additional US$25 million funding in senior debt to deploy a total of US$50 million of capital into CBEA’s future pipeline of solar-powered mini-grids. CBEA targets to deploy a total amount of US$150 million over the next two years to bring renewable energy to one million people in Africa.
CBEA’s mini-grids combine solar and batteries to provide grid-quality power to households and businesses around the clock. These near-term projects will enable residential and small business owners to access clean electricity for the first time.
International Energy Agency (IEA) report says that Africa’s solar mini-grid sector needs around US$187 billion in funds to achieve universal energy access by 2030. According to CBEA, the new project finance is key to unlocking the long-term, infrastructure-type capital that is actually required for the mini-grid sector.
Gabriel Davies, Managing Director and Head of Energy Access at Crossboundary, said the fundraising is a testament to the efforts of developers, investors, donors, and governments over the last few years. The confidence from the project investors reflects the increasing dependability on the mini-grid sector and its ability to attract institutional capital.
According to Humphrey Wireko, Managing Director of CrossBoundary Energy Access, the investment is a crucial step for the firm towards unlocking the private and public capital required to scale up the renewable mini-grid sector. CrossBoundary will mobilize this investment to bring the projects in the pipeline to life, providing clean power to African homes and businesses through these distributed assets.
William Barry, Managing Director of ARCH-ARPF, commented, “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”.
Amy Brusiloff, Community Development Executive at Bank of America, said, their investment will support clean energy solutions in remote rural areas of Africa and help the continent to drive the energy transition. The blended finance structure developed by CrossBoundary Energy Access will utilize the ability of solar mini-grid projects to achieve scale and reduce risk.
Brandon Middaugh, Director of Microsoft Climate Innovation Fund, mentioned Africa’s universal electrification requires scaling affordable and renewable energy solutions. Microsoft is proud to help CrossBoundary Energy Access’s innovative approach to mini-grid solutions that advance climate equity by providing renewable energy access to many communities.