ARCH Emerging Markets Partners’ Africa Renewable Power Fund (ARCH ARPF) has committed up to $16.5m to fund CrossBoundary Energy (CBE) to develop and finance new Commercial & Industrial (C&I) solar assets.

William Barry, Managing Director, ARCH ARPF, said: “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. Within this market, ARCH ARPF aims to partner with strong management teams and invest in scalable business models that offer compelling alternatives to their customers, including in the C&I space.”

“Now that companies recognize the attractive project economics of distributed solar PV, we are confident that 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,” he said.

This commitment represents the first stage of a larger transaction under finalisation by CrossBoundary Energy to scale solar for business across Africa.

CBE has pioneered the solar-as-a-service business model in Africa, through which corporate customers avoid upfront capital expenditure and instead enter into long-term solar service agreements.

Under these agreements, CBE, in partnership with local developers and solar contractors, finances, installs and operates solar assets that provide customers with cleaner and cheaper power. CBE has already developed landmark projects in Kenya, Rwanda, Ghana, and Nigeria, with its clients including Unilever, Diageo, Heineken, Actis and leading, local companies.

This additional funding will allow CBE to reach new markets and customers across Africa and deploy solar PV and battery storage solutions that reduce energy costs, improve power reliability and lower carbon emissions.

Pieter Joubert, CIO, CrossBoundary Energy, said: “Partnering with an industry- leading investor like ARCH ARPF highlights the proven viability of captive commercial and industrial solar projects in Africa. 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 C&I 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.”

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 that the rapid growth is being driven by a continuing decline in system costs, allowing solar to generate greater savings on corporate customers’ electricity bills.