November 17, 2020 - Afrikan Heroes

CrossBoundary Energy Raises $40M to Scale Financed Solar for Businesses in Africa

November 17, 2020

Pieter Joubert, Chief Investment Officer, CrossBoundary Energy

Pan African energy firm driving energy transition across the continent, CrossBoundary Energy is currently operating or delivering $57M in assets, serving 20 customers across 8 countries in Africa, including more than 40MW of fully financed solar PV and 10 MWh of battery storage projects; transaction provides an exit for initial investors at 15% IRR and provides a powerful proof of concept for blended finance, returning a profit to the US Treasury on USAID’s catalytic first-loss contribution; $40M of new funding enables the scaling of CrossBoundary Energy’s commercial and industrial solar services to provide many more African businesses with access to cheaper, cleaner power ; support from institutional investors and ongoing adoption by leading corporates highlights the viability and attractiveness of distributed generation.

CrossBoundary Energy (CBE) has announced the exit of its first fund at a 15% net IRR to investors. ARCH Emerging Markets Partners’ Africa Renewable Power Fund (ARCH ARPF) is providing $40M in new equity funding to exit initial investors and support CrossBoundary Energy to continue to develop, construct and operate distributed commercial & industrial (C&I) solar projects that will provide businesses across Africa with access to cheaper, cleaner power. This exit and new investment is a powerful endorsement for the role of distributed renewables in Africa and the potential of blended finance in unlocking new asset classes.

First, the substantial raise of new capital highlights the exciting potential of distributed solar to provide more reliable and affordable power to African businesses. Over the last five years, CBE has pioneered the creation of a C&I solar sector in Africa. CBE’s solar-as-a-service model allows corporate customers to avoid the upfront capital expenditure and technical risk that can be a barrier to solar adoption. Instead, customers enter into long-term solar service agreements under which CBE (in partnership with local developers and solar contractors) finances, installs and operates solar assets to provide customers with cleaner and cheaper power. CBE signed the first distributed solar power purchase agreements with corporate customers in Kenya, Rwanda, Ghana, Madagascar, Uganda, Sierra Leone, Zambia and Nigeria, and has built a strong client base with both multinational companies, including Unilever, Diageo, Coca-Cola distributors, Rio Tinto, Heineken, AB InBev, Actis, and leading local companies including Kasapreko and Xflora Group. CBE is now operating or delivering $57M in assets, serving 20 customers across 8 countries in Africa, including more than 40MW of fully financed solar PV and 10 MWh of battery storage projects.

Second, the exit of CrossBoundary Energy I (CBE1) is also a powerful demonstration of the potential of blended finance to unlock new and impactful asset classes. CBE1 was closed in November 2015 as Africa’s first dedicated fund for C&I solar. It was also a prototype for a new blended finance approach to renewables in Africa. USAID’s Power Africa initiative contributed $1.3M in the form of a repayable grant to catalyse private investors into the fund. USAID’s subordinated equity contribution attracted additional equity investors, effectively resulting in leverage of matching private capital of more than 6.0x. At the close of this transaction, this leverage increased to more than 30x and USAID’s blended finance contribution of $1.3M has now been repaid to the US Treasury with a return of 5%. CBE1 also benefited from grant support from OPIC (now the US International Development Finance Corporation) and the Shell Foundation, in partnership with the UK’s Foreign, Commonwealth & Development Office, which allowed the fund to scale its operations.

Pieter Joubert, Chief Investment Officer, CrossBoundary Energy says, “We are incredibly grateful for the early stage backing we received from our partners and investors such as Blue Haven Initiative, Ceniarth, Slocum Investments, Treehouse Investments and others, who trusted in our vision to bring cheap, clean energy to businesses across the continent and continued to support and work with us to realise that vision. In terms of what comes next, partnering with an industry-leading investor like ARCH ARPF highlights the proven viability of captive commercial and industrial solar projects in Africa. We’re very excited to work with ARCH ARPF to continue providing Africa’s leading businesses with cheaper, cleaner, more reliable power at no upfront cost. This commitment by ARCH ARPF represents the next phase of a larger $100M transaction which will allow us to take the C&I sector to scale across Africa, and in doing so, further reduce energy costs for our customers, create additional jobs within the solar sector, and significantly reduce carbon emissions.”

William Barry, Managing Director, ARCH ARPF, says, “We believe that distributed renewables will be an important part of the energy future in Africa. The lower cost for solar and storage means that companies like CrossBoundary Energy can offer retail consumers reliable, cost-effective solutions to their electricity needs. At ARCH ARPF, we aim to partner with strong management teams and invest in scalable business models that offer compelling alternatives to their customers, including in the C&I space. CBE has been able to grow a portfolio of high-quality assets and their growth continues to rapidly accelerate. We are excited to support them to scale.”

Mark Carrato, Coordinator of the U.S. Government-led Power Africa initiative, says, “Power Africa supports enterprise-led market innovations to address Africa’s energy challenges. CrossBoundary Energy’s model of distributed renewables to accelerate access to cheaper and cleaner power is an excellent example of this. In 2015, Power Africa made a repayable $1.3 million first-loss grant contribution to catalyze the creation of the CrossBoundary Energy I Fund. While the grant initially unlocked six times that amount in matching private capital, it has now leveraged 30 times our contribution from private investors. Moreover, the initial $1.3 million plus 5% interest has been returned to the U.S. Treasury. This success is a validation of Power Africa’s emphasis on helping catalyze the private sector to provide life-changing access to electricity across sub-Saharan Africa.”

Sam Parker, CEO of Shell Foundation, says “The mission of the Shell Foundation is to build investable businesses that enhance access to energy for low-income communities across Africa and Asia. CrossBoundary Energy is having a major impact through the provision of lower cost, cleaner and more reliable power to African enterprises. We are proud that our early stage support helped them reach commercial viability and scale.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Cigna Foundation Funds School Feeding in Kenya with US$200,000

Jerome Droesch, CEO of Cigna in Middle East, Africa and South East Asia

Cigna Foundation has partnered with Cup of Uji Kenya, a school feeding program founded by Hope Alive Campaign, a community based organization, to reduce food insecurity among primary school children in Kenya. In line with the partnership, the Cigna Foundation has contributed US$200,000 to fund nutritious meals for children and nurture their health and well-being.

The contribution is supported by Cigna’s Healthier Kids for Our Future®, a five-year global initiative launched in 2019 to improve the health and well-being of children – and to help build healthier, more vibrant communities for the next generation. Healthier Kids for Our Future is aligned with three of the 17 leading global objectives identified by the United Nations Sustainable Development Goals: No Poverty, Zero Hunger, and Good Health and Well-Being.

The partnership with Cup of Uji Kenya supports local NGOs with the funds with an aim to purchase and distribute 500,000 meals comprising rice and beans across local schools. Through this initiative, Cigna Foundation will empower local NGOs, who understand the requirements of schools, with resources to fulfil the needs of the community. The humanitarian project is set to incentivize primary school children in Kenya to attend school.

Speaking on Cigna Foundation’s efforts to combat global hunger, Jerome Droesch, CEO of Cigna in Middle East, Africa and South East Asia, said: “It is disturbing to witness this growing challenge of global hunger and to do nothing about it. If not addressed, we will see 840 million people facing hunger by 2030, as per the predictions of the World Food Programme. Children who go hungry are likely to suffer from severe nutritional issues that can impact both their long-term physical and mental health.”

He added: “In our efforts to offer hope for a healthier life to the children of Kenya, we are committed to this partnership with the Cup of Uji Kenya for the long haul. This effort has enabled Cigna and its employees to actively contribute towards the purchase, packaging and distribution of meals on ground. It was a deeply moving experience for Cigna’s employees to work alongside the Cup of Uji Kenya team to make this initiative come alive.”

Cup of Uji Kenya is a school feeding program founded by the Hope Alive Campaign that seeks to tackle food insecurity by providing meals to over 3,000 less fortunate school children in primary schools in Kenya. The program addresses the UN’s Sustainable Development Goals of No Poverty, Zero Hunger and Good Health and Well-Being through fighting hunger, driving education and eliminating poverty in the long term.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Africa Needs More Homegrown Software Developers to Correspond to its Growing Internet Economy

Africa is on course to add $180 billion or 5.2% of aggregate GDP by 2025 thanks to the rapid growth of its internet economy says a report from the World Bank’s IFC and Google. In 2012, the continent’s internet economy (iGDP) was estimated at just $30 billion, or 1.1% of its GDP. This year iGDP will contribute $115 billion, or 4.5% of a $2.554 trillion GDP, says Accenture. In the US the internet economy contributed around 9% of GDP in 2018.

Key to growing an internet economy—which includes everything from banks and fintechs to agritech, e-health, and venture capital—will be growing the developer talent that builds the products and engines on which it run. Last year, the French-born chief executive of Jumia, the pan-African e-commerce company, sparked outrage in African tech circles when he suggested there weren’t enough developers based in Africa to service his company’s needs.

Women currently make up 21% of developers in African countries, compared with just 15% of junior developers in the US. The IFC/Google report says there are nearly 700,000 professional developers across Africa with more than than half in five African markets: Egypt, Kenya, Morocco, Nigeria, and South Africa. That number is still relatively small against Africa’s 1.3 billion people—California alone has 630,000 developers while Latin America has 2.2 million.

But Africa’s developer talent is younger than those in more advanced economies and the overall numbers on the continent are growing faster. Just a third of them receive their training through universities, instead more than half are either self-taught or pay for online school programs, speaking to the desire and broad ambition to acquire skills for future employment and entrepreneurship in countries with few existing formal jobs, but also a shortage of digital skills.

It’s easy to see why young African undergraduates or recent graduates might choose to be self-taught or pay out of pocket for additional skills. The report notes, for example, computer science courses in Kenyan universities still predominantly teach C++, “even though Java and Scala are the programming languages in the greatest demand in the marketplace.”

To date much of the developer talent falls into the “junior developer” category which presents its own challenges as Lagos-based Andela found when it had to recruit more experienced talent to supply clients in the US and other markets. In African countries with smaller and more nascent developer populations, 43% of developers have only one to three years of experience, compared with 22% in the US.”

The report says coding classes are driving the growth in software development training. Young companies including Decagon (Nigeria), Gebeya (Ethiopia) and Moringa School (Kenya) have picked up where Andela left off in focusing on training young developers with flexible learning and bootcamp-like experiences. Google itself rolled out a program in 2017 to train as many as 100,000 developers over five years to help plug the developer skills gap. Last year Microsoft said it would spend over $100 million on a software development center initiative in Africa with its first development centers in Africa will open in Lagos and Nairobi.

As well as the fast-growing talent pool one other notable positive is that there has been what the report describes as “real traction” with growing the numbers of female developers in African markets, led by Egypt, Morocco, and South Africa. Women currently make up 21% of developers in African countries, compared with just 15% of junior developers in the US.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Tunisian 3D Startup Onboard Raises 175K

Onboard co-founders, L-R: Safwen Bouali, Cherif Redissi and Amine Troudi

Onboard, a Tunisian startup that transforms the customer support experience offered by manufacturers, using intelligent 3D manuals, has raised $175K from Kepple Africa Ventures, as well as other renowned entrepreneurs including Ahmed Hentati and Karim Jouini.

The fundraising will allow Onboard to develop the solution and facilitate its expansion in the French and European markets.

Founded by Safwen Bouali, Cherif Redissi and Amine Troudi at the end of 2019, Onboard is a SaaS platform that allows manufacturers to create quality support experiences for their consumers. Say goodbye to confusing paper textbooks, archaic support systems, call centers and old-school textbook creation software.

Onboard allows manufacturers to create 3D manuals in minutes, to share them with their customers instantly. This will allow consumers to view these manuals from any device. They are able to ask questions, and receive “visual” answers. If necessary, they can open a ticket. Manufacturers therefore have the opportunity to manage customer feedback and reported incidents in a single place. No need to acquire several solutions in order to overcome these problems.

Onboard has raised a total of $ 250K in “Seed Funding” from several accelerators, including Flat6Labs Tunis, to invest in technology and talent development.

By this investment, the startup unveils version 1.0 of its SaaS platform, available in public access this week with a range of features, a smooth customer experience and optimized support.

Onboard startup Tunisia Onboard startup Tunisia

The startup is rapidly evolving in the French and European markets. Currently, Onboard is based at Station F, in Paris, in the largest startup campus in the world, but also accelerated with Zendesk, a behemoth in terms of CRM and customer support. Onboard also has the confidence of partners like Microsoft and La FrenchTech. The client portfolio is growing rapidly with the recent addition of GP Industrie.

Onboard operates in the customer experience management market, which projects annual growth of 17.7% between 2020 and 2027. 97% of manufacturers believe that 3D technology will revolutionize their processes, whether in sales or in manufacturing training.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

5 to 10 Years Exemptions For Companies In Congo DRC

To develop the local economy, the government of the Democratic Republic of Congo has launched during this month the construction of the first Special Economic Zone in the commune of Maluku in Kinshasa. In total, 6 free zones will be built, with the objectives of attracting foreign investment and stimulating the creation of businesses.

Félix Tshisekedi, president of Congo DRC — Félix Tshisekedi, president, Congo DRC

The free zone offers tax and regulatory advantages for investors and entrepreneurs. Among other facilities, a tax exemption over 5 or 10 years for those who settle there. At the end of these once-renewable periods, payment of half of the duties and taxes owed to the State is expected.

Congo companies exemptions Congo companies exemptions

The construction of the pilot site, which spans 885 hectares and 6,500 meters of fence, has been entrusted to Strategos Group, a firm recruited by the World Bank. It will focus in particular on the construction of warehouses and the provision of space to companies from various sectors, except mining companies and banks.

In the long term, the Maluku Special Economic Zone will promote exports and allow the creation of 3,500 direct jobs.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer