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The World Bank Group's MIGA has provided the African Infrastructure Investment Fund 3 (AIIF3) with guarantees of up to $ 37.1 million to cover the Fund's equity and quasi-equity / shareholder loan investments in the Central and East African subsidiaries of Bboxx .
The guarantees apply to the subsidiaries of Bboxx in Rwanda, Kenya and the Democratic Republic of the Congo (DRC) and have a term of up to 10 years.
AIIF3 is managed by African Infrastructures Investment Managers (AIIM), one of the largest infrastructure-oriented private equity fund managers in Africa and a member of Old Mutual Alternative Investments (OMAI).
An additional guarantee of up to USD 5.9 million was also granted for the Mauritius Facility's Energy Inclusion Facility's Off-Grid Energy Access Fund (FEI-OGEF LP), an energy access fund sponsored by the African Development Bank (KfW, Europe) of US $ 100 million commission and Nordic Development Fund managed by LHGP Asset Management (Lion's Head) to fund the loan to Bboxx DRC for a period of up to five years.
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The MIGA guarantees provide AIIF3 and FEI-OGEF protection from the risks of transfer restrictions and currency inconvertibility, expropriation, and war and civil disruption.
Harry Guinness of FEI-OGEF commented, “While the market and impact opportunities are substantial, the instability due to volatility in Bboxx DRC's core markets in Goma and the Eastern DRC and the company's long-term commitment to regional expansion was critical consideration on our investment.
“MIGA's support has created the trust that FEI-OGEF needs to conclude negotiations with Bboxx DRC and to use our resources to achieve this goal.”
MIGA guarantees increased decentralization activities
Hiroshi Matano, Executive Vice President of MIGA said, “Millions of people in Africa do not have access to electricity and off-grid technologies, including stand-alone solar home systems, are key to bridging the electrification gap.”
Off-grid solar energy is one of the most promising transformation technologies that will help improve access to electricity in rural areas in developing countries. Bboxx is a next generation utility that changes lives and unlocks potential through access to energy. Bboxx develops, produces, sells and finances decentralized solar-powered systems.
Bboxx's operations in Rwanda, Kenya and the Democratic Republic of the Congo provide customers with affordable access to clean and reliable energy on a pay-as-you-go (PAYG) basis with mobile money. In addition to devices such as lights, televisions and refrigerators, the off-grid energy solutions also include individual solar home systems.
The company also uses energy as an entry point for other services such as PAYG liquefied petroleum gas bottles (LPG) and small gas burners for clean cooking in the home.
Matano added, “By improving access to affordable, reliable clean energy, MIGA's guarantees will boost economic activity, reduce greenhouse gas emissions and help create quality jobs in Rwanda, Kenya and the Democratic Republic of the Congo.”
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MIGA's guarantees will strengthen Bboxx's business as the company expands its clean energy supply. This will greatly improve economic opportunities in rural areas with low rates of electrification.
Increasing electrification is reducing the burden of traditional fuel gathering and indoor air pollution, which has a disproportionate impact on the health and productivity of women and children. The company's work has benefits for climate protection by replacing the use of kerosene and biomass to generate energy in the home and using LPG as a clean cooking fuel.
Over the next eight years, around 1.9 million tonnes of CO2e are expected to be offset in Rwanda, Kenya and the Democratic Republic of the Congo.
Vuyo Ntoi, Co-Managing Director of AIIM, said, “The potential of off-grid solar power generation systems in developing countries is vast and is key to promoting the growth of African economies.
“By promoting further investments in Bboxx, MIGA is helping to reduce one of the most important business risks for off-grid solar companies – access to capital.”