CrossBoundary Energy Raises $50 Million to Accelerate Clean and Reliable Power for African Businesses

CrossBoundary Energy, a prominent developer, owner, and operator of commercial and industrial (“C&I”) renewable energy systems, has successfully raised a significant investment of US$50 million. The investment comprises a $30 million multi-country facility provided by the Facility for Energy Inclusion (“FEI”) managed by Cygnum Capital (formerly Lion’s Head Group). Additionally, FEI is in the process of arranging an additional $20 million for CrossBoundary Energy, expected to be finalized in the third quarter of 2023.

The investment is intended to advance CrossBoundary Energy’s C&I portfolio across Africa. The facility agreement, structured by FEI as an innovative construction loan facility, enables CrossBoundary Energy to scale its investments in tailored, fully financed renewable energy solutions for corporate customers. By avoiding upfront capital expenditure and technical risks, these customers can benefit from cost-effective, cleaner, and more reliable power. CrossBoundary Energy collaborates closely with its partners to design, build, finance, and maintain renewable energy installations that meet the unique needs of its clients.

Why The Investors Invested

The investors recognize the immense potential of the commercial and industrial (“C&I”) renewable energy sector in driving clean and sustainable growth across Africa. With increasing awareness of the environmental impact of traditional energy sources and the need to transition towards cleaner alternatives, the demand for renewable energy solutions in the commercial and industrial sectors is on the rise. CrossBoundary Energy has positioned itself as a leading developer, owner, and operator of such solutions, making it an attractive investment opportunity for the investors.

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Moreover, the investors were likely motivated by the proven track record and market reputation of CrossBoundary Energy. The company has successfully delivered a portfolio of over $285 million worth of solar renewable energy assets for notable clients such as Unilever, Diageo, Rio Tinto, Heineken, and AB InBev. This demonstrated ability to secure and serve reputable corporate customers reflects the company’s strong market position and the trust it has garnered in the industry.

Furthermore, the investment aligns with the investors’ objective of supporting businesses across Africa in accessing cheaper, cleaner, and more reliable power. By providing tailored, fully financed renewable energy solutions, CrossBoundary Energy enables corporate customers to avoid upfront capital expenditure and technical risks while still benefiting from the advantages of renewable energy, including cost savings and improved environmental sustainability. This customer-centric approach resonates with the investors’ commitment to promoting sustainable growth and providing tangible value to African businesses.

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Additionally, the investors likely considered the potential for attractive returns on their investment in the renewable energy sector. As the demand for clean energy continues to rise and government policies increasingly favor renewable energy development, there is a favorable market outlook for companies like CrossBoundary Energy. The company’s demonstrated ability to secure long-term power purchase and lease agreements with corporate clients indicates a stable revenue stream and the potential for sustainable profitability.

A Look at CrossBoundary Energy

CrossBoundary Energy, founded in 2011, is a leading developer, owner, and operator of distributed renewable energy solutions for businesses in Africa. The firm specializes in providing cheaper and cleaner energy through power purchase and lease agreements. Its current portfolio comprises over $285 million worth of solar renewable energy assets, serving clients such as Unilever, Diageo, Rio Tinto, Heineken, and AB InBev.

As a member company of the CrossBoundary Group, a mission-driven investment firm, CrossBoundary Energy is committed to leveraging capital for sustainable growth and strong returns in underserved markets. The company has been recognized for its outstanding contribution to the solar industry and was awarded the title of “Solar Company of the Year” by the Africa Solar Industry Association in 2022.

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CrossBoundary Energy operates primarily in Africa’s corporate and industrial sectors, delivering tailored renewable energy solutions that meet the specific needs of its clients. The company’s comprehensive services include designing, building, financing, and maintaining renewable energy installations. By providing fully financed solutions, CrossBoundary Energy enables businesses to access affordable and reliable renewable energy without the burden of upfront capital expenditure and technical risks.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. 
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard

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

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.

Pieter Joubert, Chief Investment Officer, CrossBoundary Energy
Pieter Joubert, Chief Investment Officer, CrossBoundary Energy

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. 

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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.

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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. 

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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.” 

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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