CrossBoundary Energy Access (CBEA), the blended finance facility for mini-grids, has open sourced their approach to investing infrastructure capital across Africa.
Shell Foundation supported the establishment of CBEA in 2018 alongside Rockefeller Foundation and with co-funding from UK Aid. CBEA invests blended capital directly into mini-grid projects serving rural African households and businesses. The business aggregates individual mini-grids into portfolios, and portfolios of mini-grids into a facility.
By releasing core components of its financing approach, CBEA hopes to unlock access to the $1 trillion infrastructure funding and support the mini-grid sector to meet its potential and be the least cost method to provide energy access to at least 264 million people by 2030.
The open sourced materials include:
- A white paper that sets out the financing structure and guiding principles, the typical challenges and risks encountered in implementing the structure in practice, possible improvements to the model, and recommendations for investors, developers, donors, and governments.
- Term sheets for the project contracts and the corresponding project finance model in the first quarter of 2021.
“We’ve seen how the open source movement transformed the software industry. The best innovations in software now impact far more people, and far more quickly. We believe this radical approach to information sharing can do the same for financing energy access,” said Gabriel Davies, Head of Energy Access at CrossBoundary.
“We know this approach won’t be the best for every financier or mini-grid developer,” said Matt Tilleard, co-Managing Partner at CrossBoundary. “But we do think that we have created valuable intellectual property in adapting traditional project finance for the distributed nature of mini-grid assets.
“We believe that we will accelerate access to energy globally by proactively sharing that knowledge, and more importantly, collaborating with others to improve on it.”
The open source initiative addresses one of the critical building blocks the mini-grid sector needs to scale – long-term, low-cost infrastructure capital. It ensures that Shell Foundation funding to CBEA continues to unlock maximum impact and complements the other sector-building work we support: developers to build and operate mini-grids, the African Mini-Grid Association (AMDA) to work with governments on innovative regulation for mini-grids, and the Universal Electrification Facility (UEF) to bring in the public capital the sector needs to scale.
To find out more about the open sourcing initiative and download the white paper on CBEA’s financing approach, visit the dedicated Energy Access pages on CBEA’s website.