IFC to Invest $5M in CBEA to Boost Africa's Mini-Grid Sector

Gabriel Davies, CBEA Managing Director & Co-Founder

The International Finance Corporation (IFC) has announced its intention to invest up to $5 million in CrossBoundary Energy Access (CBEA), a platform dedicated to financing and owning renewable energy mini-grids throughout Africa.

This strategic move is part of IFC’s broader efforts to enhance energy access in underserved regions by supporting decentralized renewable energy solutions.

CBEA, established in 2019, operates as Africa’s first project finance facility specifically for mini-grids.

The platform provides capital to developers for the construction of solar-powered mini-grids, which are then operated under long-term agreements.

By directly owning these assets, CBEA ensures consistent investment returns while enabling developers to focus on operations and maintenance.

The management of CBEA is handled by CrossBoundary Energy Access Management (CBEAM), a subsidiary of the CrossBoundary Group.

Founded in 2011, the CrossBoundary Group focuses on unlocking capital for sustainable growth in underserved markets. CBEAM’s role includes overseeing the investment strategy and ensuring the effective deployment of funds into viable mini-grid projects.

Currently, CBEA’s ownership is divided between ARCH Africa Renewable Power Fund (ARCH ARPF), holding a 75% stake, and CBEAM, which owns the remaining 25%.

ARCH ARPF is a private equity fund that targets renewable power projects across Africa, aiming to address the continent’s growing energy demands through sustainable solutions.

The proposed investment by IFC signifies a substantial endorsement of CBEA’s model and its potential to scale renewable energy access.

By becoming a shareholder, IFC aims to catalyze further investments and accelerate the deployment of mini-grids, particularly in regions where traditional grid extension is economically unfeasible.

This initiative aligns with broader goals aimed at achieving universal energy access in Africa.

According to the International Energy Agency, mini-grids are among the most cost-effective solutions for electrifying remote areas, with the potential to connect at least 264 million people by 2030.

CBEA’s approach, which includes open-sourcing its investment methodology, aims to attract more capital into the sector and replicate successful models across the continent.

In previous funding rounds, CBEA has secured significant investments, including a $25 million commitment from ARCH, Bank of America, and the Microsoft Climate Innovation Fund.

Source: Empower Africa