CrossBoundary Energy (CBE) today announced the exit of its first fund at a 15% net IRR to investors. ARCH Emerging Markets Partners’ Africa Renewable Power Fund (ARCH ARPF) is providing $40M in new equity funding to exit initial investors and support CrossBoundary Energy to continue to develop, construct and operate distributed commercial & industrial (C&I) solar projects that will provide businesses across Africa with access to cheaper, cleaner power.
This exit and new investment is a powerful endorsement for the role of distributed renewables in Africa and the potential of blended finance in unlocking new asset classes.
First, the substantial raise of new capital highlights the exciting potential of distributed solar to provide more reliable and affordable power to African businesses.
Over the last five years, CBE has pioneered the creation of a C&I solar sector in Africa. CBE’s solar-as-a-service model allows corporate customers to avoid the upfront capital expenditure and technical risk that can be a barrier to solar adoption.
CBE signed the first distributed solar power purchase agreements with corporate customers in Kenya, Rwanda, Ghana, Madagascar, Uganda, Sierra Leone, Zambia and Nigeria, and has built a strong client base with both multinational companies.
CBE is now operating or delivering $57M in assets, serving 20 customers across 8 countries in Africa, including more than 40MW of fully financed solar PV and 10 MWh of battery storage projects.
Pieter Joubert, Chief Investment Officer, CrossBoundary Energy says,
“We are incredibly grateful for the early stage backing we received from our partners and investors such as Blue Haven Initiative, Ceniarth, Slocum Investments, Treehouse Investments and others, who trusted in our vision to bring cheap, clean energy to businesses across the continent and continued to support and work with us to realise that vision.
In terms of what comes next, partnering with an industry-leading investor like ARCH ARPF highlights the proven viability of captive commercial and industrial solar projects in Africa.
We’re very excited to work with ARCH ARPF to continue providing Africa’s leading businesses with cheaper, cleaner, more reliable power at no upfront cost.”
William Barry, Managing Director, ARCH ARPF, says,
“We believe that distributed renewables will be an important part of the energy future in Africa.
The lower cost for solar and storage means that companies like CrossBoundary Energy can offer retail consumers reliable, cost-effective solutions to their electricity needs.
At ARCH ARPF, we aim to partner with strong management teams and invest in scalable business models that offer compelling alternatives to their customers, including in the C&I space.
CBE has been able to grow a portfolio of high-quality assets and their growth continues to rapidly accelerate. We are excited to support them to scale.”
Mark Carrato, Coordinator of the U.S. Government-led Power Africa initiative, says,
“Power Africa supports enterprise-led market innovations to address Africa’s energy challenges.
CrossBoundary Energy’s model of distributed renewables to accelerate access to cheaper and cleaner power is an excellent example of this.
In 2015, Power Africa made a repayable $1.3 million first-loss grant contribution to catalyze the creation of the CrossBoundary Energy Fund.
While the grant initially unlocked six times that amount in matching private capital, it has now leveraged 30 times our contribution from private investors.
Moreover, the initial $1.3 million plus 5% interest has been returned to the U.S. Treasury.
This success is a validation of Power Africa’s emphasis on helping catalyze the private sector to provide life-changing access to electricity across sub-Saharan Africa.”
Featured Image: Jabi Lake Mall, Nigeria
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