CrossBoundary Energy Access (CBEA), a financing facility for mini-grids, has raised US$25 million in new funding commitments.
The funds were from ARCH Emerging Markets Partners Limited, Bank of America, and Microsoft Climate Innovation Fund.
This investment will leverage an additional US$25 million in senior debt to deploy US$50 million of capital into CBEA’s near-term pipeline of solar powered mini-grids.
CBEA will deploy a total of US$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. This initiative will enable individual local residential and small business subscribers to access renewable electricity for the first time.
These solar powered mini-grids will help bridge the gap by bringing clean electricity to rural areas of Africa that do not presently have access to electricity.
According to the International Energy Agency (IEA), the solar mini-grid sector needs us$187 billion to achieve universal energy access by 2030.
“CrossBoundary Energy Access has grown up with the sector and this fundraise is a testament to the work of the developers, governments, and donors over the last few years,” Gabriel Davies, Managing Director and Head of Energy Access at CrossBoundary, said.
“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.”
CBEA believes project finance is key to unlocking the long-term, infrastructure-type capital that the mini-grid sector needs. CBEA first pioneered its blended project finance structure in 2019 with funding from Rockefeller Foundation, Ceniarth, DOEN Foundation, Shell Foundation and UK Aid.
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 US$150 million is fully deployed.
Humphrey Wireko, Managing Director, CrossBoundary Energy Access, also emphasised that 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,” Humphrey said.
Amy Brusiloff, Community Development executive for Environmental, Social and Governance, at Bank of America, stated that 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,” he said.