The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group has issued guarantees of up to US$37.1 million to a fund managed by African Infrastructures Investment Managers (AIIM), the African Infrastructure Investment Fund 3 (AIIF3). The AIIF3 invests in the power, transport and midstream energy sectors across sub-Saharan Africa.
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.
MIGA’s guarantees will strengthen economic activity, reduce greenhouse gas emissions, and help create high quality jobs in Rwanda, Kenya, and DRC
Hiroshi Matano, MIGA Executive Vice President
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.
The MIGA guarantee to improve energy access in Africa
Bboxx designs, manufactures, distributes, and finances decentralized solar powered systems. These systems help improve energy access in many rural communities in Africa. The company’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.
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.”
