2020 WILL BE REMEMBERED AS A TOUGH YEAR.
BUT IT WAS ALSO A YEAR OF TENACITY, RESILIENCE, AND QUIET ACCOMPLISHMENT.
While we are already well into the new year, we would like to take a moment to lift up some of our stories of success, and thank our clients, partners, collaborators and friends of CrossBoundary for their trust.
We are proud that despite the 2020 headwinds, we made progress in our vision of unlocking capital for sustainable growth and strong returns in underserved markets globally.
We grew over the last year
We expanded our global presence, and client reach
We opened seven new offices: Colombia, Tunisia, Lebanon, Moldova, Iraq, Mauritius and Thailand, and are now based in 17 cities around the world
We delivered on client engagements in 46 countries
We advised on 116 transactions across a range of sectors, including energy, financial services, agriculture and FMCG
CrossBoundary Group and Brown Advisory announced a strategic partnership: We are excited to share the news of our strategic partnership with Brown Advisory, one of the largest privately held U.S. investment management firms. The partnership underpins the shared belief of both firms in three major trends: an increasingly interconnected world and the rising importance of global frontier markets; the necessity of incorporating environmental, social, and governance elements into investment decisions; and a shift towards impact principles in the capital allocation philosophies of the next generation of wealth creators.
For close to a decade, our advisory team has worked in underserved markets as trusted advisors to entrepreneurs, investors, policy makers, and development actors, such as the US Government's Prosper Africa Initiative. We support mutually beneficial transactions across a broad range of sectors. In 2020, our clients didn't stop, and neither did we. In May last year, we published an article in Medium, Companies in frontier markets are showing their resilience - arguing that despite the mounting adversities, we are seeing many companies in frontier markets demonstrate strong resilience and adaptability. Born in uncertain operating environments in normal times, these businesses have built strong and flexible backbones. For them, the pandemic is an additional speed bump on an already bumpy road. This tenacity and resilience is further demonstrated by the diversity and spread of the transactions we advised on in 2020.
Companies in frontier markets are showing their resilience
Published in Medium.
Scaling Up Investment for Covid-19 Economic Recovery and Jobs in Africa
Published with the Tony Blair Institute for Global Change on private and public-sector led investment facilitation and sector transformation.
President's Advisory Council - Doing Business in Africa (PAC-DBIA):
As members of the PAC-DBIA, we contributed to "Keys to Success." a compilation of the collective insights from the Council on best practices U.S. companies should consider in order to approach, succeed, and invest in African markets.
Jake Cusack was interviewed by Portico Advisers founder, Mike Casey for Episode 6:
Investing in Frontier and Fragile Markets
for the Portico Podcast.
Associate Principal, Tunuka Gray, participated in the Global Policy Institute panel on The Future of International Development.
In early 2013, while we were growing CrossBoundary's investment advisory practice, we started working on the idea of a special purpose fund for commercial & industrial solar in Africa. We had rather optimistic dreams of how straightforward it would be to bring financed solar systems to African businesses. We still believe it is logical, but it has certainly not been easy! We were first-time fund managers without a notable track record in renewable energy, and our plan necessitated building a market for a new sector of distributed solar projects in Africa.
Five years later, we have completed a fully realized exit of that first fund at our target net internal rate of 15%, and secured $40M in new equity funding from ARCH Emerging Markets Partners' Africa Renewable Power Fund. This is the first phase of a planned $100M fundraiser that will be finalized over the next 6 months.
We have now seen the emergence of effective competitors who share our vision, and have helped create this market. This success was partly a result of hard work, but it was also the courage of our customers to disrupt the status quo, and the trust of our investors and partners that enabled us to drive this disruption.
We are also excited to share that we have been recognized in the ImpactAssets 50 list for 2021, which spotlights private capital fund managers delivering social and environmental impact, as well as financial returns.
CBE signed the first distributed solar power purchase agreements with corporate customers in Kenya, Rwanda, Ghana, Nigeria, and Sierra Leone, with further projects to be signed shortly in Madagascar, Uganda, and Zambia, and has built a strong client base with both multinational companies, including Unilever, Diageo, Coca-Cola distributors, Rio Tinto, Heineken, AB InBev, Actis, and leading local companies, including Kasapreko and Xflora Group.
CBE is now operating or in the process of delivering $57M in assets, serving 20 customers across 8 countries in Africa, including more than 50 MW of fully financed solar PV and 10 MWh of battery storage projects.
Energy Access CBEA
CBEA was launched in January 2019, with funding from Ceniarth and The Rockefeller Foundation as Africa's first project finance fund for mini-grids. We invest long-term equity and debt into mini-grids through a project finance structure, delivering first-time grid-quality power to rural households and businesses. CBEA-I will soon fully commit the first $18M pilot facility.
CBEA-II: Scaling up our project finance solution for mini-grids
With CBEA-II's funds fully committed, we are now scaling up our project finance platform for mini-grids, and are targeting $150M in blended finance to bring power to 1 million people in sub-Saharan Africa.
Open Sourcing our project financing approach for mini-grids
Mini-grids are a new and disruptive way to achieve energy access. The International Energy Agency (IEA) forecasts that mini-grids will be the least cost method to connect at least 264 million people by 2030. Mini-grids are ready to scale in Africa, but are not yet attracting the finance they need. Together with our partners, we have developed a new model of project financing to enable this transformative shift in financing. Now, to accelerate energy access, this approach needs to be adopted more widely. Not so long ago, we saw how the Open Source movement transformed the software industry. The best innovations in software now impact far more people, far more quickly. We believe this radical approach to information sharing can do the same for financing energy access. We are therefore open sourcing the core components of our financing approach, with the aim of accelerating energy access for all by 2030.
We are aware that this approach will not be the best for every financier or mini-grid developer. But we do believe that we have created valuable intellectual property in adapting traditional project finance for the distributed nature of mini-grid assets. We believe that we will accelerate access to energy globally by proactively sharing that knowledge, and more importantly, collaborating with others to improve on it.
Open Sourcing Infrastructure Finance
Mini-Grids Are Ready to Change the
Education Infrastructure CBEI
As CrossBoundary's latest investment platform, we are currently raising capital (equity and debt) for investment into the educational infrastructure space. Over the past year, CrossBoundary and Si-Advisers formed a joint venture to develop an affordable student housing platform in Uganda under the brand "Makazi." Through the partnership, we have acquired a plot in Kampala. Over the past few months, we have been laying the groundwork for the platform, designing the brand, and developing the project. We will be breaking ground this year following our capital raise, and are excited to further scale the platform.
A special highlight for the CrossBoundary team last year was a global staff webinar with Eliud Kipchoge, the first person in recorded history to complete a marathon in under 2 hours.
Humble and inspiring, Eliud spoke about his path to success, and his philosophies for living a purposeful and intentional life, founded on the premise that "no human is limited."
It encouraged us to face our challenges head-on, to work with people that are better than us, to nurture and value each other in a culture of accountability and respect, to enjoy the work we do, to be present in our journey and to recognize the beauty and joy of the world, even as we seek to make it better.