Rural homes and businesses in Africa are set to benefit from CrossBoundary Energy Access, a funding facility for solar powered mini-grids that aims to cure the problem of access to electricity suffered on the continent.
With funding commitments from The Rockefeller Foundation and Ceniarth, CrossBoundary Energy Access will initially invest Ksh1.6 billion into mini-grids serving 170,000 people.
The overall aim is for the project finance solution to unlock the over Ksh1.1 trillion required to provide power to approximately 100 million people in Africa.
Markets with supportive mini-grid regulatory frameworks, such as Tanzania, Nigeria, and Zambia are set to benefit from the initial close of the project, whose launch was announced on January 23.
CrossBoundary, a Sub-Saharan Africa investment fund for commercial and industrial solar energy, said mini-grids are critical to achieving universal electrification in Africa at what it terms “the least cost.”
Gabriel Davies, Head of Energy Access at CrossBoundary said, “We believe long-term project finance structures will allow mini-grids to scale. We’re building investment portfolios that will attract the long-term, infrastructure-type capital the sector needs from institutional investors.”
The Rockefeller Foundation hailed the project as bringing a “much-needed sense of urgency” in forming a “more effective public and private sector coordination that can transform the pace of last-mile electrification.”
“It represents an ambitious, concrete effort to realize the comparative advantage mini grids have to serve over 100 million people in Africa,” said Ashvin Dayal, Managing Director, Power, The Rockefeller Foundation.
Over 600 million people in Sub-Saharan Africa still lack access to electricity,with CrossBoundary estimating that at least 100 million of these people can be most cost effectively served by mini-grids.
The model preferred by the Sub-Saharan Africa investment platform is that of using private sector development and investment to accelerate the buildout of those grids.
“We hope that as more data emerges to support the economics of the model, additional capital will flow into the sector at terms that allow us to gain increased leverage on our subordinate investment,” said Ceniarth Director Diane Isenberg.
Private sector capital and private sector mini-grids have an essential role to play in achieving Sustainable Development Goal 7 (SDG7): Ensure access to affordable, reliable, sustainable and modern energy for all.