Armstrong invests $30m in SEA solar

The recently formed private equity firm has made a small investment in a Southeast Asian renewable energy portfolio out of its maiden fund.

Armstrong Asset Management, a private equity firm specialising in cleantech investments in Southeast Asia, has committed to invest up to $30 million out of its maiden fund into a portfolio of solar and biogas power projects across Thailand, the Philippines and Indonesia, according to a company statement.

The projects are being developed by Annex Power, a renewable energy group focused on Southeast Asia. The company has built and operated more than 100 megawatts (MW) of renewable energy projects, including 58MW of solar photovoltaic projects in Thailand. In the same country, Annex has secured contracts for another 30MW of projects.

This is the second investment out of Armstrong’s maiden fund, which held a first close on $66 million in May of last year and is targeting $150 million. This April, Armstrong announced its first investment as a strategic cooperation with energy developer Symbior Solar Siam to develop and operate a 30MW portfolio of six small-scale solar power plants in central and northeast Thailand, according to the statement.

Andrew Affleck, Armstrong managing partner, said the firm was attracted to the investment with Annex because of the firm’s commitment to projects that are of the type and scale suitable for the firm’s fund.

In addition, the investment objectives of Armstrong “align very well” with those of Annex, according to Daniel Gaefke, managing director of Annex. “[Armstrong’s] experience in the renewables sector and in Southeast Asia creates many synergies we plan to build on,” he added. Annex particularly hopes to grow its development and asset management operations in Thailand, where it already has a base, as well as in the Philippines and Indonesia, where project opportunities have just begun to present themselves, according to the statement.

Thailand’s renewable energy market is the most developed in Southeast Asia, with a target of having 25 percent of the country’s total energy come from renewable sources by 2021. The government recently approved an increase of the solar power target to 3,000MW.

Based in Singapore, Armstrong focuses on the clean energy sector in Southeast Asia’s emerging markets through small-scale infrastructure projects. The firm is on track to hold a final close in its $150 million maiden fund in September, according to Affleck, and its investors so far include European development institutions GEEREF, DEG and the International Finance Corporation.