The Facility for Energy Inclusion (“FEI”) managed by Cygnum Capital (formerly Lion’s Head Group) provided a $30 million multi-country facility and is in the process of arranging an additional $20 million for CrossBoundary Energy, a leading developer, owner, and operator of commercial and industrial (“C&I”) renewable energy systems.
June 20 2023 - The Facility for Energy Inclusion (“FEI”) signed a facility agreement to provide $30 million of senior debt to CrossBoundary Energy (“CBE”) and is in the process of arranging an additional $20 million in Q3 2023. This transaction structured by FEI as an innovative construction loan facility, allows CBE to further scale its investments in C&I renewable energy solutions across Africa.
CBE provides tailored, fully financed renewable energy solutions to its corporate customers allowing them to avoid upfront capital expenditure and technical risks, whilst still benefitting from cheaper, cleaner, and more reliable power. Through close collaboration with its partners, CBE provides renewable energy solutions that adapt to the needs of their clients including designing, building, financing, and maintaining renewable energy installations.
“We believe that C&I renewables drive clean and sustainable growth across Africa. By supporting CrossBoundary Energy, which has established itself as a pioneer in the C&I renewable energy sector, the Facility for Energy Inclusion consolidates its market-leading position in the sector. With strong market knowledge, flexibility and speed of execution, we focus on driving results for our clients at FEI. Through this construction loan facility, we have demonstrated our capacity to deliver bespoke structuring to support our clients’ growth,” said Carmen de Castro, Managing Director and Fund Lead at Cygnum Capital.
“This financing is aligned with our belief that the business sector across Africa should be able to benefit from cheaper, cleaner and more reliable power. This investment validates CrossBoundary Energy’s position as a trusted provider of customer-centric renewable energy solutions to the African business community. We look forward to working with the Facility for Energy Inclusion as we seek to deliver an operational portfolio of over $500 million in assets within the next 5 years,“ said Zaina Otieno, Associate Principal at CrossBoundary Energy.
About CrossBoundary Energy
CrossBoundary Energy is a leading developer, owner, and operator of distributed renewable energy solutions for businesses, providing cheaper and cleaner energy through power purchase and lease agreements. CrossBoundary Energy is currently delivering a portfolio of over $285 million of solar renewable energy assets for clients including Unilever, Diageo, Rio Tinto, Heineken, and AB InBev, and was recognized by Africa Solar Industry Association as “Solar Company of the Year” in 2022. CrossBoundary Energy is a member company of the CrossBoundary Group, a mission-driven investment firm founded in 2011 and committed to unlocking the power of capital for sustainable growth and strong returns in underserved markets.
About Cygnum Capital (formerly Lion’s Head Group)
Cygnum Capital Group is an investment bank and asset manager (formerly known as Lion’s Head Group), operating across frontier and emerging markets. Cygnum Capital Asset Management manages five pioneering funds: four debt funds including: (i) the African Local Currency Bond Fund (“ALCBF”), a ground-breaking investment vehicle established to support local currency capital markets, (ii) Off-Grid Energy Access Fund (“OGEF”) which supports companies in off-grid energy such as SHS and small- medium mini-grids, (iii) FEI which support companies that provide a range of renewable energy solutions such as medium-large mini- grids, C&I and IPP with a maximum capacity of 25 MW, and (iv) AfricaGoGreen Fund (“AGG”) which supports companies combating climate change by reducing the use of fossil fuels through new technologies and that increase energy efficiency and promote economic development in high impact target sectors; and a VC private equity fund (v) E3 Low Carbon Economy Fund for Africa (“E3 LCEF”) which invests in climate-smart services, digital connectivity & applications, low-carbon productivity enablers. Cygnum Capital Asset Management has over $750 million in assets under management with investments in 27 African countries.
About the Facility for Energy Inclusion
FEI is designed to support small-scale independent power producers delivering power to the grid, mini-grids, commercial and industrial and captive power projects. FEI was set up by the African Development Bank as part of its New Deal for Africa initiative. In addition to the investment by the AfDB, FEI received equity funding from the German Federal Ministry for Economic Cooperation and Development through KfW and Norfund and a loan commitment from the Austrian Development Bank. The AfDB also invested on behalf of the Clean Technology Fund and the European Commission.
The transaction was supported by FEI’s Project Preparation Facility (“PPF”), funded by the Global Environment Facility, through the African Development Bank. The PPF provides returnable grant funding for last-mile processes crucial to closing transactions and to fund due diligence and preparatory costs incurred in establishing innovative structures or transactions that FEI seeks to lend to.
The Lender was advised by Dentons (legal), RINA Tech Africa (technical) and IBIS Environmental Social Consulting Europe Ltd (E&S).