- The Multilateral Investment Guarantee Agency (MIGA), home of the World Bank Group Guarantee Platform, executed framework terms of $495 million with CrossBoundary Energy Holdings (CBE) of Mauritius for its investments in distributed renewable energy projects in Africa, potentially spanning up to 20 countries.
- Under the framework terms, MIGA has issued an initial set of guarantees to CBE.
- The guarantee covers currency inconvertibility and transfer restriction risks for up to 15 years. Â
The guarantees will be implemented through a portfolio-based structure, which will streamline guarantee issuance for individual projects. This approach will help CBE to expand its operations across approximately 100 projects, including in 11 IDA countries and 4 fragile or conflict-affected countries. The distributed renewable energy projects will enhance electricity reliability and quality and reduce energy supply costs for businesses. These solutions increase the resilience and competitiveness of local businesses, supporting industrial productivity and enabling job creation.
MIGA will leverage a first loss risk sharing of up to $61.5 million from the IDA Private Sector Window-MIGA Guarantee Facility, which will be applied across individual guarantees for IDA-eligible countries, including the Democratic Republic of Congo, Guinea, Mali, Madagascar, Malawi, Mozambique, Rwanda, Sierra Leone, Uganda, Tanzania, and Zambia.
MIGA will also leverage the Renewable Energy Catalyst Trust Fund for a first loss risk participation of up to $37.6 million, to be applied across individual guarantees for non-IDA-eligible countries, including Côte d’Ivoire, Egypt, Eswatini, Ghana, Kenya, Namibia, Nigeria, Senegal, and South Africa.
Aggregation of projects to enable investment and de-risking is a central theme for both the distributed renewable energy (DRE) sector and MIGA’s Mission 300 strategy. What stands out in this transaction is the powerful combination of CBE’s corporate-level project aggregation, bringing together a portfolio of multiple C&I projects under a single platform, and MIGA’s portfolio-based guarantee structure. Together, these features unlock access to long-term commercial bank financing for distributed energy companies, which have historically struggled to scale due to fragmented investments and complex risk profiles.
CBE has had challenges in obtaining systematic political risk insurance due to its large portfolio of investments across Africa. The traditional investment-by-investment approach is costly and administratively burdensome, limiting the ability to efficiently mitigate transfer and currency inconvertibility risk across a broad portfolio. CBE and MIGA have worked together to develop a portfolio-based approach that allows MIGA to provide currency inconvertibility and transfer restriction risk coverage more efficiently and uniformly. This allows CBE to de-risk its entire investment portfolio, aligning with lender (such as the Standard Bank Group) and investor expectations, allowing additional private capital mobilization while enhancing financial resilience across African markets. The Standard Bank of South Africa Limited was appointed to lead and arrange up to $300 million senior debt to support the scaling of CrossBoundary Energy’s renewable energy portfolio serving Commercial and Industrial (C&I) clients across Africa.
Reliable electricity remains a critical barrier for C&I firms across Sub‑Saharan Africa. According to recent reports, 75% of firms experience power outages, happening on average 8 times per month for more than 5 hours. On average, firms lose 5–8% of annual sales due to unreliable power, with some losing over 10%—and in extreme cases up to 31% of annual sales. Over 52% of Sub-Saharan African manufacturers already own, or share, a diesel generator due to the poor service they’ve been provided by energy utilities. In 2024 alone, almost 6 GW of captive C&I projects and 1.7 GW of wheeling projects were newly announced.
CBE solutions provide reliable and cost-effective power to commercial and industrial companies, enhancing their operational efficiency. This improvement not only facilitates job creation but also stimulates economic growth in the regions where these companies are situated.
Author: Bryan Groenendaal
