Armstrong enters mini-hydro market in Indonesia

Singapore-based Armstrong Asset Management will fund 50MW of mini-hydropower plants in Indonesia for up to $22.5m.

Armstrong Asset Management’s Southeast Asian clean energy fund is committing $22.5 million (nearly 14 percent of its $164 million total investment capital) to the 50-megawatts (MW) mini-hydropower generation projects led by Jakarta-listed construction company PT Nusa Konstruksi Enjiniring Tbk (NKE) in Indonesia.

The mini-hydro power projects are at various stages of permitting process and include a 5MW project in Java and three projects totaling 21MW in Jakarta, due to be operational by the end of the second quarter of 2016 and end of 2016 respectively.

Djohan Halim, president and director of PT Inti Duta Energi (PIE), NKE’s subsidiary specialising in mini-hydropower, commenting on PIE and Armstrong’s partnership said: “We share a commitment to the potential and the need for rapid growth in the development of clean, efficient and low risk energy solutions.”

The Indonesian government has recently reviewed feed-in-tariffs for biomass, biogas, municipal waste and hydropower plants with a generation capacity of less than 10 MW, making it one of the most attractive renewable energy sectors in South-East Asia.

Armstrong Asset Management is Armstrong’s clean energy fund focusing on Southeast Asia’s emerging markets. Armstrong specialises in small-scale infrastructure projects. It achieved a final close on its debut clean energy fund in November 2013 with institutional investors including IFC, DEG, FMO, Proparco, SIFEM, GEERE and Unigestion. This is the fund’s fourth investment since its 2013 close and the company has invested alongside renewable energy companies Annex Power, Symbior Elements, and the Blue Circle.

NKE is an Indonesian publicly listed company operating in civil engineering and construction works. Since its establishment in 1982, NKE has successfully completed over 200 infrastructure projects and over 250 building projects across Indonesia, including the 180MW Asahan 1 hydro-electric power plant in Sumatra.