The Armstrong South East Asia Clean Energy Fund, said to be the first of its kind in the region, has secured US$65 million in its first funding round. Overall, it aims to raise $150 million for small-scale power generation, including solar, in Southeast Asia. It is believed the region will become a “highly attractive” small-scale project market.
On the back of the first successful funding round, led by European development finance institutions GEEREF and DEG, and an unnamed Asian-based corporation, the Armstrong Fund says it expects to make the first solar and mini-hydro deals in the coming months.
By July 2013, it hopes to close another two funding rounds, raising $150 million in total for small-scale solar, wind and mini-hydro power generation projects in such emerging markets as Thailand, Malaysia and Indonesia. The goal is to provide early-stage capital to infrastructure developers in the aforementioned regions.
Specifically, the fund is looking to conclude 10 to 15 investment deals, worth between $5 million to $12 million, over 10 years for renewable energy projects under 10 MW in size. According to a statement released, “A key feature of the Armstrong investment strategy is the aggregating or bundling together of multiple small-scale operational project assets in attractive portfolios and investments being realised upon trade-sales. A gross return of 20 percent is projected, alongside significant, quantifiable development impacts.”
Commenting, Andrew Affleck, managing partner, Armstrong Asset Management, said, “To date the team has originated a strong pipeline of potential deals and detailed negotiations are underway. We are hopeful of completing one to two key deals soon. Small-scale solar and mini-hydro are two priority sub-sectors the team is currently focused on.”
He added, “We are excited as we see the fund’s innovative and differentiated model to be extremely well-suited for the policy framework here and, more importantly, effective in addressing rapidly growing energy demands.”
