MIGA, a member of the World Bank Group, has issued guarantees of up to US$37.1 million to a fund (AIIF3) managed by African Infrastructures Investment Managers (AIIM), one of Africa’s largest infrastructure-focused private equity fund managers and a member of Old Mutual Alternative Investments (OMAI). The guarantees cover the funds’ equity and quasi-equity/shareholder loan investments in Bboxx Capital Limited’s (Bboxx) subsidiaries in Rwanda, Kenya, and the Democratic Republic of the Congo (DRC) for up to 10 years. An additional guarantee of up to US$5.9 million has also been issued to the Facility for Energy Inclusion’s Off-Grid Energy Access Fund (FEI-OGEF LP) of Mauritius, a US$100m energy access fund sponsored by the African Development Bank, KfW, the European Commission and Nordic Development Fund and managed by LHGP Asset Management (Lion’s Head), to cover its loan to Bboxx DRC for a period of up to 5 years. The MIGA guarantees provide protection to AIIF3 and FEI-OGEF against the risks of Transfer Restriction and Currency Inconvertibility, Expropriation, and War and Civil Disturbance.
Off-grid solar is among the most promising transformative technologies contributing to an increase in access to electricity in rural areas in the developing world. Bboxx is a next generation utility, transforming lives and unlocking potential through access to energy. Bboxx designs, manufactures, distributes, and finances decentralized solar powered systems. Bboxx’s operations in Rwanda, Kenya, and DRC provide customers with affordable access to clean and reliable energy on a pay as-you-go (PAYG) basis using mobile money. The off-grid energy solutions include individual Solar Home Systems alongside equipment like lights, televisions, and refrigerators. Bboxx is also using energy as the entry point to other services, such as PAYG liquefied petroleum gas (LPG) cylinders and small gas burners for domestic clean cooking.
“Millions of people lack access to electricity in Africa, and off-grid technologies, including standalone solar home systems, are key to bridging the electrification gap,” MIGA Executive Vice President Hiroshi Matano said. “By providing increased access to affordable, reliable clean energy, MIGA’s guarantees will strengthen economic activity, reduce greenhouse gas emissions, and help create high quality jobs in Rwanda, Kenya, and DRC.”
MIGA’s guarantees will strengthen Bboxx’s operations as the company expands its provision of clean energy. This will significantly improve economic opportunities in rural areas with low rates of electrification. Increased electrification reduces the burden of collecting traditional fuels and indoor air pollution, both of which disproportionately affect the health and productivity of women and children. The company’s work has climate mitigation benefits by replacing household use of kerosene and biomass for energy generation, and by using LPG as a clean cooking fuel. Over the next 8 years, approximately 1.9 million metric tons of CO2e are expected to be offset across Rwanda, Kenya, and DRC.
“The potential of off-grid solar systems for energy generation in the developing world is substantial and is key to fostering the growth of Africa’s economies,” Vuyo Ntoi, co-managing director of AIIM said. “By catalyzing more investments into Bboxx, MIGA is helping to reduce one of the key business risks off-grid solar companies face - access to capital.”
“While the market and impact opportunity is substantial, the history of volatility in Bboxx DRC’s core markets in Goma and Eastern DRC and the long term commitment of the company to regional expansion meant that instability was a critical consideration for our investment,” said Harry Guinness of FEI-OGEF. “MIGA’s support provided the confidence FEI-OGEF needed to finalize its negotiations with Bboxx DRC and deploy our funds to make that impact objective a reality.”
Bboxx operates an “energy as a service” business model. Bboxx’s proprietary comprehensive management platform Bboxx Pulse® backed by IoT technology, ensures remote monitoring and management, using data and predictive analytics to anticipate and proactively resolve any potential issues before becoming a problem for the customer. The company has positively impacted the lives of over 480,000 people in Rwanda, 470,000 in Kenya, and 90,000 in DRC, and provides high quality jobs to over 800 employees across its markets.