This archive report was first published on 8 August 2019.
On August 8, 2019, CrossBoundary Energy Access (CBEA), a mini-grids financier, announced a partnership with PowerGen Renewable Energy to invest $5.5 million in 60 mini-grid projects in Tanzania.
PowerGen, a mini-grid developer, has connected over 50,000 people since its launch in 2011. The partnership aims to finance 60 mini-grids serving more than 34,000 people in rural homes and businesses in Tanzania.
According to Gabriel Davies, Head of Energy Access at CrossBoundary, "Project finance is an established way to finance large infrastructure projects, but this is the first time it has been applied to rural mini-grids in Africa. We believe that this is key to unlocking more than $11 billion dollars for mini-grids needed from investors to connect at least 100 million people to power."
Mini-grid developers like PowerGen have struggled to attract long-term financing for their projects due to the small size of each mini-grid. To address this, CBEA established a special purpose entity in Tanzania that will purchase PowerGen's existing and future operating mini-grids in Tanzania.
The sale of the mini-grids to CBEA soon after completion allows PowerGen to recycle capital and focus on developing more projects. PowerGen will continue to provide long-term customer and asset management services to the mini-grid customers.
"PowerGen has installed hundreds of renewable energy systems across seven countries in East Africa. We believe the sector is now ready for the larger scale infrastructure finance that will enable it to scale. CrossBoundary Energy Access shares our vision of mini-grids providing future-proof energy access that is a win-win for investors and consumers," said Aaron Cheng, President, PowerGen.
