Download project financing term sheets used to finance over $80m of mini grids in Africa

CrossBoundary Access believes open sourcing financial tools and approaches across the sector will accelerate the flow of capital needed to achieve universal energy access in Africa.

The CrossBoundary Access team has published two purchase and sale agreement (PSA) term sheets covering two common transaction structures:

1. Asset transfer, which represents a transaction structure where operational mini-grid assets are transferred to an entity owned by the acquirer; and
2. Share purchase, which represents a transaction structure where the acquirer purchases the SPV (AssetCo) that owns the operational mini-grid projects through a transfer of shares.

The PSA term sheets summarize the key terms of the transfer of either assets or shares, including the technical standards that the mini-grids are required to meet, the purchase price, and performance requirements of the mini-grids or SPV being transferred.

Also available as part of this release is an operating services agreement (OSA) term sheet, which summarizes the key terms of the operating services agreement between the mini-grid operator and owner. It specifies the scope of services and the operating fee and covers the crucial aspects of mini-grid operation including diesel use, uptime requirements, demand stimulation, and major capex replacements.

“Mini-grids have a critical role to play in bridging the energy gap in Africa. These term sheets, together with the financial model we released in October, allow others to adopt a mini-grid project finance approach more quickly and at less cost. By releasing the financing tools CrossBoundary Access developed over the last 6 years, we believe we can help facilitate more capital flow into this tried and tested model of infrastructure development,” said Terry Otinga, Senior Investment Associate and Open Source lead at CrossBoundary Access.

“CrossBoundary Access is pushing the boundaries and finding innovative ways to finance energy access that meets the energy needs of under-served customers across Africa,” said Kwaku Owusu-Achaw, Business Development Director at UK charity, Shell Foundation. “As a charity focused on catalysing innovation and investment into clean energy solutions, Shell Foundation believes the Open Source initiative to be game-changing in attracting more capital into the sector and focusing bright minds on innovating on what CrossBoundary Access has started. Most importantly, it will make energy available to people that do not have it.”

The Open Source initiative is funded by Shell Foundation, with co-funding from the UK government through the FCDO. CrossBoundary Access was advised by Foley Hoag.

Download template term sheet for operating service agreement

Download template term sheet for purchase and sales agreement – asset transfer

Download template term sheet for purchase and sales agreement – share purchase