Project detail - CrossBoundary Energy Holdings

Who is our prospective customer?

CrossBoundary Energy (“CBE”) is a leading developer, owner, and operator of renewable energy systems for private commercial and industrial (“C&I”) customers in Africa. It operates as a distributed Independent Power Producer (“IPP”), providing financed, integrated energy solutions that provide cleaner power under an energy-as-a-service business model, with all projects aggregated into a single platform and financed at the portfolio level. Since 2015, CBE has built up a portfolio of over 28 operational assets (62 MW generation capacity + 28 MWh BESS) in 10 African countries. Shareholders include ARCH Africa Renewable Power Fund (“ARCH”,40%), a joint venture between Norway’s biggest pension fund and Norfund (“KLP Norfund”, 35%), and CrossBoundary Energy Management (25%).

What is our funding objective?

FMO’s investment will finance the development of CBE’s planned pipeline, totaling USD 285 million over two tranches – 2 (a) and (b). Tranche 2(a), USD 195 million mainly for the funding of the Kamoa-Kakula Copper Mine Solar PV and BESS Plant, and the remainder of CBE’s 2025 pipeline. Tranche 2(b), USD 90 million will be used to fund CBE’s 2026 pipeline. FMO’s participation will be up to USD 35 million in Tranche 2(a) and up to USD 45 million in Tranche 2(b).

Why do we want to fund this investment?

CBE provides renewable and hybrid energy solutions to companies and projects in off-grid and bad-grid locations, thereby displacing expensive and polluting diesel generators and improving the stability of supply. The Company is a forerunner and market leader in the African C&I space, and management has a proven track record of building and executing a substantial pipeline of projects. A portion of the off-takers are critical mineral mining companies, which are crucial to the global success of the energy transition.

What is the Environmental and Social categorization rationale?

Preliminary E&S category is A, while the majority of the projects can be categorized as E&S category B or B+, contextual and reputational risks upgrade is applicable related to the countries CBE will be developing projects in, and/or the off-takers and their sectors. Key characteristics of this engagement include: Labor and operational health and safety during construction, human rights, reputational risks, and biodiversity conservation impacts. Applicable IFC PS include: PS 1: Assessment and Management of Environmental and Social Risks and Impacts; PS 2: Labor and Working Conditions; PS 3: Resource Efficiency and Pollution Prevention; PS 4: Community Health, Safety, and Security and PS 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources. IFC PS 5 (Land Acquisition and Involuntary Resettlement) and 8 (Cultural Heritage) may be triggered through land acquisition by the off-takers. IFC PS 7 (Indigenous Peoples) has not been triggered thus far but may be applicable for future projects, considering the countries where CBE is currently present or may be expanding to, although the likelihood is small.