News of the Mekong Region energy partnership spreads globally
With the announcement last month that Armstrong Asset Management has teamed up with The Blue Circle to invest in clean energy projects in Mekong Region (Thailand, Vietnam and Cambodia), word has spread like wild fire around the world reported, by Bloomberg Energy and Renewable Energy World, among others. This issue we profile the company which was started by two Frenchmen in Singapore only last year. Read More
This is how the Renewable Energy World Editors reported the announcement:
New Financing Vehicle for Mekong Solar and Wind Energy
LONDON, 13 June 2014– Armstrong Asset Management has forged a new partnership agreement with The Blue Circle for wind and solar project financing in the Mekong Region of Thailand, Vietnam and Cambodia. With Armstrong agreeing to commit up to US $40 million in equity to fund the construction of wind and solar projects, it will also take a minority equity stake in The Blue Circle – a vertically integrated renewable energy developer operating in the region.
Currently the developer has a pipeline of over 600 MW of renewable energy projects under evaluation or negotiation in the Mekong Region.
“Having an institutional investor like Armstrong as a shareholder and project equity partner, with their extensive operational experience in Southeast Asia and specialization in renewable energy, will certainly accelerate the growth of The Blue Circle portfolio and strengthen our financing ability” said Olivier Duguet, CEO.
The agreement between the two Singapore based companies means that The Blue Circle will also benefit from Seed Capital Assistance Facility (SCAF) funding , an initiative by UNEP, ADB and GEF designed to help project developers overcome some of the challenges of greenfield project development.
Armstrong closed its Clean Energy Fund when it reached $164 million last November. Prior to the latest deal, it had made two investments from the fund: a capital commitment of up to US $30 million to Annex Power for solar PV and biogas projects in Thailand, Indonesia and the Philippines, and an equity stake in Symbior Elements to develop a portfolio of solar generation in Central and Northeast Thailand.
The development follows a recent co-investment deal between Armstrong and Mandiri Investment Management to work together to invest in renewable energy projects in Indonesia, starting with small and micro hydropower developments.
So who or what is The Blue Circle?
Here’s a brief profile:
The Blue Circle focuses on developing wind and solar energy projects in Thailand, Vietnam and Cambodia. The Singapore based company looks to bridge the gap in project development in the Mekong Region by bringing international project development experience, financial expertise and capabilities together with local market understanding. Its growth strategy is twofold: through the development of its own projects and through acquisition or partnership with local developers. By being vertically integrated, The Blue Circle can identify greenfield sites, pursue project development milestones up until financing and operating of the generating assets.
It was in November last year (2013) that The Blue Circle was formed. Here is the announcement at the time:
French leading Renewable Entrepreneur Olivier Duguet is teaming with Southeast Asia Alternative Energy Specialist Jeff Peron to launch The Blue Circle. Headquartered in Singapore, with presence in Ho Chi Minh City and Phnom Penh, the new company aims at becoming a leading Independent Power Producer in the Greater Mekong River region. The Blue Circle is targeting to develop and invest in renewable energy projects in Vietnam, Cambodia, Laos, Thailand and Myanmar.
“Time has come for the Mekong countries to consider Renewable Energy for their base load needs” emphasizes Olivier Duguet. The Blue Circle positions itself as the next generation of Renewable Energy provider with innovative, custom-made green technology solutions for the power off-takers or communities it will serve. The company believes that to prevent the world’s fastest growing sub-continent from relying too heavily on fossil fuel imports, decentralized clean energy is the solution. Solar and wind energy will be the resources of choice for The Blue Circle, which boasts more than 21 years of experience in the field with its current management team.
Growth prospects for 2014 have been revised upwards by the Asian Development Bank at 7.5% for Cambodia, 5.5% for Vietnam, while the Word Bank is forecasting 5% growth for Thailand next year. “We are seeing energy shortage as a bottleneck for economic development in the Mekong region” adds Jeff Peron. ”
For example, there is a strong demand for alternative energy sources to support the growth of the tourism industry in coastal areas, or to power factories and industrial zones in countries such as Cambodia.” Given the current price of fossil fuels and their volatility, clean renewable sources in Thailand, Vietnam and Laos are promoted through feed-in tariffs or tax incentives to support their growing domestic consumption, or to export to neighboring countries. Blackouts are experienced weekly in Cambodia and Vietnam as both countries are racing to add new capacity.
In that context, The Blue Circle intends to deliver renewable energy at competitive prices and rapidly grow its asset base.