Danish Investment Fund Supports CrossBoundary Energy with $40 Million to Expand Renewable Energy Systems Throughout Africa

CrossBoundary Energy, a leading renewable energy company, has announced a significant investment of $40 million from Impact Fund Denmark. This funding is set to expand CrossBoundary Energy's project pipeline, contributing to the surge in solar capacity across Africa and the growing institutional and private commitment to distributed renewables powering the continent's businesses.

The investment aims to entrench the energy-as-a-service model within Africa's commercial sector. CrossBoundary Energy's zero-capex model removes upfront investment barriers, allowing clients access to clean, predictable power without purchasing hardware. This model has been successful in serving multinational clients such as Unilever and Guinness.

With this investment, CrossBoundary Energy will focus on expanding its on-site solar and battery systems for commercial and industrial clients across Africa. The company will use the funds to support the development, construction, and operation of distributed renewable energy projects. CrossBoundary Energy sells electricity via long-term power purchase agreements (PPAs) and lease contracts, often at rates below grid tariffs and the total cost of running diesel generators.

The investment from Impact Fund Denmark comes at a crucial time, as Africa added 2.4 GW of new solar capacity in 2024, with expectations to install 23 GW more by 2028. This growth in solar capacity is a testament to the growing institutional and private commitment to distributed renewables.

However, the distributed energy market in Africa faces challenges. Viable project economics depend on stable policy environments, enforceable contracts, and strong O&M standards. Currency risk is another critical issue. To unlock greater scale in the distributed energy market, there is a need for more blended finance vehicles, local bank participation, and standardization of PPA structures and asset servicing practices.

The increased investment in CrossBoundary Energy and the expansion of its project pipeline is a positive sign for the growing competition in the distributed energy market. More local and international developers are targeting the distributed energy market, increasing competition and driving down costs. The achievement of cost parity with combustion sources for solar energy on the continent is further evidence of this trend.

Despite these challenges, the private sector is shifting towards on-site generation. Companies are increasingly opting for long-term agreements for on-site systems due to the impact of fuel costs and outage risks on their operations. CrossBoundary Energy aims to replace costly diesel generators and deliver stable power to businesses unable to rely on national grids.

In markets like Kenya, Nigeria, and Ghana, on-site C&I solar power is priced at USD 0.10-0.14/kWh, with projections falling to USD 0.05/kWh by 2030. This affordability, combined with the benefits of clean, reliable power, makes CrossBoundary Energy's investment and expansion a timely and important step towards a sustainable energy future for Africa.

In conclusion, the $40 million investment from Impact Fund Denmark into CrossBoundary Energy is a significant boost for the renewable energy sector in Africa. It is a clear indication of the growing institutional and private commitment to distributed renewables and the entrenchment of the energy-as-a-service model within Africa's commercial sector. As CrossBoundary Energy expands its project pipeline, it will play a crucial role in driving the surge in solar capacity across the continent and helping businesses transition away from costly and unreliable diesel generators towards clean, affordable, and sustainable energy solutions.

Danish Investment Fund Supports CrossBoundary Energy with $40 Million to Expand Renewable Energy Systems Throughout Africa