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Africa's First Project Financing Facility for Mini-Grids Announces $25 Million in New Funding Commitments

Strategic Insights

— 1 min read

African communities are poised to benefit from a significant boost in renewable energy access, as Africa's first project financing facility for mini-grids, CrossBoundary Energy Access (CBEA), has announced $25 million in new funding commitments from ARCH Emerging Markets Partners Limited, Bank of America, and Microsoft Climate Innovation Fund. This 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, ultimately bringing clean energy to one million people in Africa over the next two years.

Key Takeaways:

  • CBEA plans to deploy a total of $150 million over the next two years, enabling the mini-grids to provide 24/7 grid-quality power to households and businesses in rural Africa.
  • The solar 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 $187 billion to achieve universal energy access by 2030.
  • CBEA believes project finance is key to unlocking the long-term, infrastructure-type capital that the mini-grid sector needs, creating a new model for funding rural electrification in Africa.
  • The blended finance approach of CBEA aggregates renewable energy mini-grid projects to achieve scale and reduce risk, making it easier for large institutions to invest in the sector.
  • CBEA's innovative structure has grown up with the sector and has worked closely with governments, donors, and developers to create a scalable business model.
  • The investment from ARCH, Bank of America, and Microsoft reflects the growing maturity of the mini-grid sector and its ability to attract institutional capital.

Statistics:

  • $25 million in new funding commitments from ARCH Emerging Markets Partners Limited, Bank of America, and Microsoft Climate Innovation Fund.
  • Additional $25 million in senior debt to deploy $50 million of capital into CBEA's near-term pipeline of solar powered mini-grids.
  • $150 million to be deployed over the next two years to bring clean energy to one million people in Africa.
  • 600 million people in Africa do not have access to electricity, according to the International Energy Agency (IEA).
  • $187 billion needed by the solar mini-grid sector to achieve universal energy access by 2030.

Sources:

  • Bank of America Corporation
  • ARCH Emerging Markets Partners Limited
  • Microsoft Climate Innovation Fund
  • CrossBoundary Energy Access
  • International Energy Agency (IEA)
  • Africa Renewables Power Fund (ARCH ARPF)

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