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CrossBoundary Energy’s investment pioneers Sustainable power stakeholders succesfully raise US$8mn of equity to bring solar solutions to African businesses
nvestment firm CrossBoundary Energy has recently completed the first close of CrossBoundary Energy Fund I, Africa’s first dedicated fund for Commercial & Industrial solar. Through 2016 and 2017, the fund will deploy over US$25mn to build solar facilities to power African enterprises through the SolarAfrica platform. Due to a dramatic fall in cost, solar is now a viable alternative energy source for businesses in Africa. But it needs finance to be attractive. Across Africa, economic growth is stifled by expensive and unreliable electricity. This challenge represents an immense opportunity for investment. Matt Tilleard, co-managing partner of CrossBoundary, observed, “Africa is undergoing an energy revolution and has become a laboratory for pioneering new methods of energy delivery. A key driver of this has been the dramatic fall in cost of solar power – down by over 80 per cent since 2008. Solar is now often cheaper than the grid in a majority of African countries.” Jake Cusack, co-Managing Partner at CrossBoundary, noted, “For many of the businesses that drive Africa’s growth, solar power is now an alternative source of cheaper and cleaner energy. However adoption remains low due to two barriers. First, solar has a substantial upfront cost. Without financing, solar installers are typically only able to oﬀer upfront purchase of the solar system. This means that the customer has to pay the full cost of 25 years of electricity on the first day. Second, many customers are unfamiliar with solar and reluctant to take responsibility for the technical and operational details of the system.” Mr Tilleard said, “In markets such as the US, both these barriers were removed through the introduction of financed solar solutions. Instead of paying upfront, the financier builds the solar asset and the customer enters into a long-term power purchase agreement (PPA). With today’s announcement, we are bringing the same financed
solar solutions to Africa. Financing is now available to make cheaper, cleaner energy a reality for African enterprise.” Empowering project developers through the SolarAfrica platform CrossBoundary Energy will deploy its investment capital through SolarAfrica, a platform that provides solar installers a fully financed ‘PPA in a box’ to oﬀer customers. SolarAfrica brings together CrossBoundary Energy’s financing with technical oversight and asset management services from NVI Energy. Through SolarAfrica, CrossBoundary Energy allows solar installers to oﬀer PPAs to African firms – enabling them to pay for the solar assets over time, just as they would pay for grid electricity.
The installation at the Garden City Mall in Nairobi is the largest solar carport system in Africa
African Review of Business and Technology - April 2016