The solar energy potential in Africa has remained largely untapped due to financial challenges and lack of capacity. While several solar firms are operating on the continent, the number of households benefiting from renewable energy remains low.
A Kenya-based solar investment firm, CrossBoundary Energy Access (CBEA), which was set up in 2019, is among the few solar energy providers on the continent. The investment firm was set up with backing from the Rockefeller Foundation, Ceniarth, DOEN Foundation, Shell Foundation and UK Aid.
More than 600 million people in Africa do not have access to electricity, according to the International Energy Agency (IEA). Since it was set up, CBEA, which is now Africa’s first project financing facility for mini-grids, has helped multiple households across Africa to get renewable energy.
The investment firm recently raised $25 million to finance solar-powered mini-grids in Africa. The funding was raised from ARCH Emerging Markets Partners Limited, Bank of America and Microsoft Climate Innovation Fund. The mini-grids combine solar and batteries to provide 24/7 grid-quality power to households and businesses, CrossBoundary Energy Access said in a statement. It added that the initiative will allow individual local residential and small business subscribers to access renewable electricity for the first time.
“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,” CrossBoundary Energy Access Managing Director Humphrey Wireko said.
According to Techcrunch, ARCH made a $10 million equity investment as Microsoft and Bank of America injected $15 million mezzanine financing. CrossBoundary Energy Access said the investment will “leverage an additional $25 million in senior debt to deploy $50 million of capital into CBEA’s near-term pipeline of solar powered mini-grids.”
CBEA plans to use $150 million to bring clean energy to one million people in Africa over the next two years. The investment firm has already worked with solar companies in Nigeria, Kenya, Ghana and Rwanda, including Topec, SolarAfrica, and PowerGen to deploy multiple solar mini-grids, Techcrunch further reported.