Kenya's Clean Energy Investment Firm, Crossboundary Secures $25M for Solar Mini-grids in Africa
Kenya’s Crossboundary Energy Access (CBEA) has secured $25 million from ARCH Emerging Markets Partners limited, Bank of America, and Microsoft Climate Innovation Fund to back renewable energy projects across the continent.
CBEA is a mini-grid infrastructure fund and a subsidiary of Crossboundary – an investment company dedicated to commercial and industrial solar in Africa-
ARCH committed $10 million in equity, while Microsoft and Bank of America contributed $15 million in mezzanine financing, a debt that converts to equity.
According to the company, the new funding will unlock an additional $25 million in senior debt, allowing it to secure $50 million in the capital, which will also be used to finance near-term solar-powered mini-grids.
The fund, established in 2019 with initial support from the Rockefeller Foundation, Ceniarth, DOEN Foundation, Shell Foundation, and UK Aid, intends to invest $150 million in solar projects over the next two years.
As a financier, commercial owner, and operator of mini-grids, CBEA has helped households and businesses access clean energy in several African countries.
Humphrey Wireko, the managing director of CrossBoundary Energy Access, said, “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.”
To deploy multiple solar mini-grids, the CBEA collaborated with several solar companies in Nigeria, Kenya, Ghana, and Rwanda, including Topec, SolarAfrica, PowerGen, Centennial, solarcentury, and soventix.
According to the World Bank, with the right policies in place, mini-grids have the potential to provide clean energy to half a billion people by the end of this decade. Moreover, with the suitable investment in the sector and encouragement from African governments to organizations like the CBEA, the current 75% of Sub-Saharan Africans without access to electricity will enjoy connectivity.
Commenting on the deal, William Barry, the managing director of ARCH Emerging Markets Partners Limited’s Africa Renewable Power Fund (ARCH ARRF), 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. 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.”