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Under the establishment of its CrossBoundary Energy Access (CBEA) fund, the CrossBoundary Group has closed its first fundraiser of USD 16 Mn to invest in mini-grids across Africa.
Made possible by funding assists from the Rockefeller Foundation and Ceniarth, the group will be providing first-time power to homes and businesses in markets with supportive mini-grid frameworks, including Nigeria, Tanzania, and Zambia.
.@AfCDigest has shared our announcement on the first close of the CrossBoundary Energy Access $16m #minigrid facility. We're excited to demonstrate how we will use blended finance to connect power to 170,000 people #Africa #SDG7 https://t.co/9K8cEwqaFD pic.twitter.com/pjfPYmN0cY— CrossBoundary (@CrossBoundary) January 30, 2019
.@AfCDigest has shared our announcement on the first close of the CrossBoundary Energy Access $16m #minigrid facility. We're excited to demonstrate how we will use blended finance to connect power to 170,000 people #Africa #SDG7 https://t.co/9K8cEwqaFD pic.twitter.com/pjfPYmN0cY
The USD 16 Mn is expected to go a long way in brightening the lives of 170,000 people in Africa. Of the 600 million estimate of people in Sub-Saharan Africa that yet are cut off from constant power access, CrossBoundary makes another estimation that at least 100 million of them can be effectively served by mini-grids today.
The group reveals that by means of private sector development as well as investments, the buildout of grids across Sub-Saharan locations could increase energy access by miles.
Ashvin Dayal, the managing director of power at the Rockefeller Foundation expressed pride to be an early investor in the CBEA fund, as it is an ambitious move to make good on the comparative advantage of mini-grids as it they can serve more than 100 million Africans. “We believe that CBEA brings a much-needed sense of urgency, and provides a platform for more effective public and private sector coordination that can transform the pace of last-mile electrification”, he said.
Needful to say is that private sector mini-grids, which was a role to play in the Sustainable Development Goals (SDG), have been dying for financial attention. In semblance to the lot of energy infrastructure projects, mini-grids demand substantial upfront funding while they deliver predictable returns over a 10-15 year period. Over the years, the sector has literally struggled to access investments to scale operations across the continent.
CrossBoundary Energy Access ties the loose ends to commercial scale by allowing private capital to invest through a blend with patient equity from impact-first investors in the likes Rockefeller and Ceniarth. The facility, which was designed through the Transforming Energy Access program by Shell Foundation and the UK assist, also gives room for private investors to fund the projects themselves. For this, there is hardly any similarity with how most of the planet’s 1,000 gigawatts of wind and solar projects have been promoted financially.
Gabriel Davies, Head of Energy Access at CrossBoundary, says, “Mini-grids are critical to achieving universal electrification in Africa at the least cost. We believe long-term project finance structures will allow mini-grids to scale. We’re building investment portfolios that will attract the long-term, infrastructure-type capital the sector needs from institutional investors.”
The CrossBoundary Group has more than 50 staff and offices in Lagos, Nairobi, Johannesburg, Dubai, New York, Washington DC, and Bamako.
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