Many of Africa’s commercial and industrial businesses want to switch cleaner and more reliable sources of energy but are deterred by upfront costs. CrossBoundary Energy supports their energy transition by handling the installation and upfront financing of solar panels, battery systems and minigrids.
The company operates a commercial and industrial, or C&I, portfolio of more than 500-megawatts of solar, 600 megawatt-hours of battery storage, as well as some thermal power capacity. Its customers include humanitarian agencies and mining, telecommunications and agriculture companies.
CBE has secured $40 million from Impact Fund Denmark to support its growing portfolio of solar + battery storage, including a copper mine installation in the Democratic Republic of the Congo.
“The investment is on commercial terms but the ability to provide this level of capital is catalytic to continued growth in the C&I renewables market in Africa,” CBE’s Matt Tilleard told ImpactAlpha.
Deal de-risking
CBE is working on plans for a 30-megawatt plus battery project for the Kamoa-Kakula Copper mining complex in the southern part of the DRC. CBE will own the plant, and Kamoa Copper will pay for the energy it uses. CBE estimates it will offset more than 86,000 tons of carbon emissions per year by replacing the mine’s fuel-powered generators.
Impact Fund Denmark’s investment helped CBE “navigate cross-border legal complexities to close the transaction,” said CBE’s Tom Roberts in a statement on the deal.
CBE also has a $495 million, 15-year guarantee for its portfolio from the World Bank’s Multilateral Investment Guarantee Agency, which provides political risk insurance, trade finance and credit guarantees for emerging market projects.
Catalyzing C&I
CBE has been a key player in Africa’s fast-growing commercial and industrial solar sector. In 2020, it sold a 40-megawatt off-grid solar portfolio to ARCH Emerging Markets Partners, giving its investors a full exit, a healthy 15% return, and providing a proof point for exits in the market.
A number of African banks have since invested in the field, including South Africa’s Standard Bank, which offered CBE a $300 million loan facility.
The firm has been on an fundraising streak this year. The International Finance Corp., also disclosed in May that it plans to make a $7.5 million equity investment in CBE this year. Norfund re-upped in January with a fresh $40 million investment.
“Distributed renewable energy that provides power directly to customers, whether C&I or residential, is providing a path for capital to flow into African energy infrastructure that complements more traditional utility infrastructure,” Tilleard said.
