Patrice Motsepe-owned African Rainbow Capital and its investment advisory firm operating outside SA, ARCH Emerging Market Partners, has committed R249 million to develop and finance new commercial and industrial solar assets across Africa.
ARCH, through its Africa Renewable Power Fund (ARCH ARPF), yesterday announced its commitment to fund CrossBoundary Energy (CBE) with the money in equity funding that will provide businesses across Africa with access to cheaper, cleaner power.
CBE operates in Kenya, Rwanda, Ghana and Nigeria, and has a pipeline of over 300MW of projects on the continent.
In a statement, ARCH ARPF says its commitment represents the first stage of a larger transaction under finalisation by CBE to scale solar for business across Africa.
The announcement comes as the International Energy Agency (IEA) predicts a strong acceleration in the global adoption of distributed solar photovoltaic (PV) solutions. The IEA report, Renewables 2019, forecasts that distributed solar PV will account for almost half of the near-term growth in the overall solar PV market, with global installed capacity expected to increase by over 250% by 2024.
The IEA also notes the rapid growth is being driven by a continuing decline in system costs, allowing solar to generate greater savings on corporate customers’ electricity bills.
William Barry, managing director of ARCH ARPF, says: “The off-grid segment is an important component of our African renewable power mandate as businesses and retail consumers alike seek reliable, cost-effective solutions to their electricity needs.
“Now that companies recognise the attractive project economics of distributed solar PV, we are confident CBE’s pipeline of projects will accelerate, and are delighted to be supporting their industry-leading management team as they expand their footprint across the continent.”
Chief investment officer at CBE, Pieter Joubert, welcomed the deal, saying: “We’re very excited to work with ARCH ARPF to continue providing Africa’s leading businesses with cheaper, cleaner, more reliable power at no upfront cost.
“This commitment by ARCH ARPF represents the first phase of a larger transaction, which will allow us to take the commercial and industrial sector to scale across Africa, and in doing so reduce energy costs for our customers, create additional jobs within the solar sector, and significantly reduce carbon emissions.”
In SA, the solar energy market has experienced moderate growth since 2018, in terms of new photovoltaic installations.
The South African government has signed renewable power purchase agreements, bringing some much-needed hope to the market and further propelling the industry forward.
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