IEA Green Light: Asia’s New Clean Energy Fund

The newly formed Armstrong South East Asia Clean Energy Fund has US$66 million to invest in approved small-scale infrastructure projects, geared to generate up to 10 megawatt (MW) from renewable energy resources, such as solar, hydro, wind in Malaysia, Thailand and Indonesia and other Southeast Asian emerging markets. Meanwhile, International Energy Agency (IEA) says of 11 technologies required to reduce emissions, only renewable power – particularly from wind and solar – merited a green for being on track. Read More

Armstrong readies for launch of new US$150m Clean Energy fund focused on Southeast Asia’s emerging markets

Singapore-based asset manager secures commitments towards a first closing at US$66m from leading European finance institutions GEEREF and DEG, and an Asian-based corporate

Singapore, 10 May 2012 – Armstrong Asset Management, a newly-established independent clean energy asset manager is set to launch its first fund, the Armstrong South East Asia Clean Energy Fund (“ASEACE” or the “Fund”). The new private-equity vehicle aims to provide development capital to small-scale renewable energy and resource efficiency projects in Southeast Asia. With an expected first closing at US$66 million this month, the fund will include commitments from two leading European development finance institutions: GEEREF, the Fund-of-Funds advised by European Investment Bank (EIB) and European Investment Fund (EIF), and DEG, a member of KfW Bankengruppe. In addition, the third and largest limited partner in the initial close will be a South East Asian-based corporate with significant interests in multiple industry sectors.

With a target size of up to US$150 million, the 10-year fund will invest in small-scale infrastructure projects in Malaysia, Thailand and Indonesia and other Southeast Asian emerging markets. Typical projects sizes will generate power of up to 10 megawatt (MW) from renewable energy resources, such as solar, hydro, wind.

“ASEACE is on track to be the only operational clean energy fund dedicated to Southeast Asia. While both China and India tend to get more attention, for Armstrong, we’ve found that focusing on Southeast Asia has been a strong draw for our investors. It helps that new regulatory policies are being enacted by governments in the region which encourage the development of the renewable energy sector,” said Andrew Affleck, managing partner of Armstrong Asset Management. “In fact, Armstrong’s management team members have deep sector and cultural knowledge of Southeast Asia from their involvement in over 100 energy and infrastructure projects.”

“Our focus is on small-scale projects which provide some real advantages well-suited for Southeast Asia. It’s an investment strategy that we have employed in Europe previously and we are now adapting it for this region where opportunities are much greater,” said Mr Affleck who has 22 years of asset management and investment banking experience in the Asian region, having focused on clean energy investments for the last 7 years.

Prior to setting up Armstrong Asset Management, Andrew Affleck was CEO of Low Carbon Investors Ltd, a dedicated global clean energy fund management group with over US$300 million under management. During his four year tenure, he co-led the firm’s transformation from a US$50 million single fund cleantech venture business to a multi-fund clean energy infrastructure asset manager. The infrastructure funds have led to operational experience gained through the development and acquisition of 28 small scale (sub 10MW) solar and wind projects which in aggregate amount to 83MW.


About Armstrong Asset Management

Armstrong Asset Management is an independent asset manager, based in Singapore, focused on the clean energy sector in Southeast Asia’s emerging markets. Armstrong has announced its first fund will invest in small-scale infrastructure projects and is on track to achieve first closing at US$66 million. The Armstrong South-East Asia Clean Energy fund (“ASEACE”) is set to be the only operational clean energy fund of its kind in the region. Armstrong’s multidisciplinary team consists of 7 investment professionals with deep sector knowledge and cultural experience from a collective 68 years of Southeast Asia operating experience. As a responsible investor, Armstrong believes integrating sustainable, environmentally friendly practices into day-to-day activities delivers tangible benefits, creates additional opportunities, benefits society and reduces risk. Such an ethical approach leads to follow on opportunities and improved financial returns especially when the true costs of increasingly scarce natural resources are considered.


GEEREF is an innovative Fund-of-Funds, providing global risk capital through private investment for energy efficiency and renewable energy projects in developing countries and economies in transition, it aims to accelerate the transfer, development, use and enforcement of environmentally sound technologies for the world’s poorer regions, helping to bring secure, clean and affordable energy to local people. The fund was initiated by the Directorate General for Environment and Directorate General for Europe Aid Co-operation Office (AIDCO) of the European Commission. GEEREF is both a sustainable development tool and a strong support for global efforts to combat climate change. It is sponsored by the European Union, Germany and Norway and is advised by the European Investment Bank Group (European Investment Bank and the European Investment Fund).

About DEG

DEG – Deutsche Investitions- und Entwicklungsgesellschaft, a subsidiary of KfW, has been financing the investments of private companies in developing and emerging market countries for 50 years. As one of the largest European development finance institutions, it promotes private business structures to contribute to sustainable economic growth and improved living conditions. DEG invests in profitable projects that contribute to sustainable development in all sectors of the economy.


By Roger Harrabin for BBC News (25 April 2012):

Leading energy ministers have been told the world is on track for a long-term temperature increase of 6C unless they change their priorities.

The International Energy Agency (IEA) said on current trends, emissions would double from 2009 to 2050.

The deputy director of the IEA, Richard Jones, urged ministers: “Please take our warning seriously.”

He was speaking at the Clean Energy Ministerial, a forum for 23 major nations.

Mr Jones said the world could still possibly hold CO2 under 32Gt – the level equated with a 2C temperature rise – but only if nations co-operated urgently on clean technology.

The report Tracking Clean Energy Progress, says: “The current trend of increasing emissions is unbroken with no stabilisation of GHG [greenhouse gas] concentrations in sight.” It projects that if this continues, “energy use will almost double in 2050, compared with 2009, and total GHG emissions will rise even more. Long-term temperature rise is likely to be at least 6C.”

Mr Jones presented a traffic light scorecard. Of 11 technologies to reduce emissions, only renewable power – particularly from wind and solar – merited a green for being on track.

Fuel economy, electric vehicles and industry were given an amber.

Most of the chart is red, including biofuels for transport; building efficiency; nuclear power; carbon capture and storage in industry and power generation; and cleaner conventional coal.

Sex appeal

Mr Jones said countries were still ignoring easy gains in energy efficiency. It is less “sexy” than some other policies, he admitted – but it is especially good at creating local jobs.

Coal is another concern for the IEA. Energy-hungry emerging economies are still building old-style power plants with an efficiency of just 35% whilst modern plants running at very high temperatures like those built in Japan are 50% efficient or more.

Carbon capture and storage (CCS) – in which CO2 emissions are captured and pumped into underground rocks – is described as “woefully off pace”.

In 2008, Roger Harrabin visited the Isogo 1 plant in Yokohama, Japan, one of the most advanced coal-fired power stations in the world

Under their scenario for stabilising global temperature rise at 2C, the IEA envisages CCS providing 19% of global emissions cuts.

Mr Jones said that 65 CCS plants are on the drawing board, but not one is operating at scale. Only four small projects carry out sufficient monitoring to demonstrate permanent storage of CO2, he said.

“CCS remains trapped in its infancy. Many fear it will remain stillborn,” he explained. This would be grave, he said, as so many countries will rely on coal-fired power stations for the next 40-50 years until they wear out.

Mr Jones said the main reason for the CCS failure is lack of government will. But one government source told BBC News it was difficult for politicians to provide the billions needed to kickstart CCS when the investment did not actually provide energy – unlike renewables.

Mr Jones said countries needed to be bold with their investments and policies, even during a recession to reap the benefit of plentiful clean power in later years.

‘False economy’

This was not just about preventing the potential of dangerous climate change, he said. Investment in clean energy would bring energy security, reduce dependency on oil and save money that would be needed to adapt to climate change.

“Five trillion dollars of investment is needed in a decade. In the long term it will lead to net savings. Delay is false economy,” he said.

He said one bright spot had been the emergence of wind and solar photovoltaics. In both technologies, he said, costs are plummeting as firms scale up production prompted by government policy.

Globally, more than $1 trillion had been invested in clean energy, and in Europe investment in renewables now outstrips that for fossil fuels.

The IPCC’s Fourth Assessment Report, published in 2007, gave estimates for warming of between 1.8C and 4C under different scenarios during the 21st Century.

The IEA projections are based on work done with the modelling group developing scenarios for the IPCC Fifth Assessment Report. The 2C target is designed to offer a 80% likelihood on best estimates of staying within the 2C threshold.


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