In 2015, we wrote an article in Quartz Africa outlining our intention to raise and deploy a project finance fund for commercial and industrial solar in Africa. At that point, we had been fundraising for almost two years. The goal felt ambitious. We were first-time fund managers without a notable track record in renewable energy, and our plan necessitated building a market for an entirely new sector of distributed solar projects in Africa.

Now, five years later, we have just completed a fully realised exit of that first fund at our target net internal rate of return of 15%, and secured $40m in new equity funding from Arch Emerging Markets Partners’ Africa Renewable Power Fund. This is the first phase of a planned $100m fundraise that will be finalised over the next six months.


More importantly, we are now operating or delivering over $57m of distributed renewable power assets, including more than 40MW of fully financed solar photovoltaics and 10MWh of battery storage projects across eight countries in Africa. Our client list includes Unilever, Diageo, AB InBev, Coca Cola, Heineken, Rio Tinto, Actis and a long list of major local industry leaders.

We’ve also had the opportunity to help governments and regulators pioneer this new model of electricity delivery, signing some of the first distributed solar power purchase agreements in Kenya, Ghana, Nigeria and Rwanda. Finally, we’ve seen the emergence of effective competitors who share our vision and have helped create this market.

This success was partly the result of a lot of hard work and persistence. It was also the result of the courage of our customers to disrupt the status quo, and the trust from our investors and partners that we could drive this disruption. 

But more importantly to the sector as a whole, we have been lucky to ride the wave of two mega-trends that are transforming the world of energy and finance.

1. The rise of distributed renewables

We observed in our 2015 article that solar and storage are disruptive sources of energy. They are technologies, not fuels, which means that they have an experience curve — solar costs drop 20% for every doubling of cumulative volume manufactured.


Solar has continued to obey this experience curve. It has fallen approximately 50% in installed cost since 2015 and is now 90% cheaper on a cost-of-energy basis than it was in 2009. We estimate that rooftop solar is now the cheapest source of energy in most African countries.

Storage costs are following closely behind. Since 2012, storage costs have fallen by 82%. Combined solar and storage systems are already competitive with the grid for some of our clients. We anticipate that within the next five years, combined solar and storage will continue to become a competitive option for more of our customers.

It would be easy to skim these numbers, but we encourage you to sit with them for a moment. Modular rooftop solar is now the cheapest source of energy for most African businesses and it keeps getting cheaper. Again, storage is following close behind, meaning many customers will be able to generate and store even more of their own clean energy.

This will create immense change for the existing energy sector and utilities. It also opens a huge new path to powering faster and more sustainable economic growth in Africa.

2. The potential of blended finance as a catalytic force for change

We only had the opportunity to test this vision of cheaper and cleaner energy because of another powerful trend: blended finance. With increasing momentum, finance is being reshaped in fundamental ways to enable broader and more sustainable outcomes.

Our first fund was a pioneering example of blended finance put to work. We were supported by a broad coalition of impact investors, including Blue Haven Initiative, Ceniarth, Slocum Investments and Treehouse Investments, who invested for both commercial and impact outcomes.

The Shell Foundation, in partnership with the UK’s Foreign, Commonwealth & Development Office, provided financial and technical support to our team and OPIC (now the DFC) provided assistance with legal structuring costs.

Most notably, almost 15% of our fund’s capital was provided as a repayable grant with a fixed return by USAID’s Power Africa. This contribution de-risked investment into this nascent sector and unlocked more than six times that initial contribution in private capital from investors. With the conclusion of this new fundraise, that initial contribution from USAID has now unlocked and leveraged 30 times more private capital than the initial blended finance contribution. Even better, the initial contribution from USAID has now been returned to the US Treasury.

Since 2015, the momentum for both blended finance and environmental, social and governance investing has continued to build. We hope that the early success of CrossBoundary Energy is another proof point that reinforces this momentum.

Energy and finance are two of the most important engines of growth. As the world emerges from Covid-19, we have an opportunity to build a more sustainable and inclusive world.

We have spent the past five years at the frontier of change. Now, we’re pleased to report back with good news. Change is possible, and the path to sustainable and inclusive growth is wider and more achievable than ever. 

Matt Tilleard and Jake Cusack are co-founders and managing partners at CrossBoundary Group, and Pieter Joubert is the chief investment officer at CrossBoundary Energy