AC Energy to pour in $30 million in Myanmar RE joint venture
By Lenie Lectura -October 15, 2019
from Business Mirror
AC ENERGY INC. and Myanmar-based Yoma Strategic Holdings Ltd. will put up a 50:50 joint venture to develop around 200 megawatts (MW) of renewable-energy (RE) projects in Myanmar.
Both will pour in at least $30 million into Yoma Micro Power, which builds micro power plants and mini-grids that provide electricity to off-grid rural communities and telecommunications towers in Myanmar.
“Yoma Strategic and AC Energy are looking to establish a 50:50 joint venture that will see AC Energy and Yoma Strategic working together to drive the growth of Yoma Micro Power. As part of this transaction, AC Energy and Yoma Strategic have signed a binding term sheet which envisages the joint venture, investing at least $30 million into Yoma Micro Power,” AC Energy reported on Monday.
The planned joint venture is expected to drive the growth of Yoma Micro Power, which is currently rolling out 250 micro power plants by end of 2019 and is expected to scale up to more than 2,000 sites by 2023.
Patrice Clausse, COO of AC Energy Renewables, said the partnership is “a very meaningful investment for AC Energy.”
“We are delighted to partner with Yoma Strategic who shares the same aspiration to build a meaningful portfolio in renewable energy and together, be able to contribute to creating an environmentally sustainable future.
“Our combined expertise, strong financing capabilities and AC Energy’s commitment to shore up presence in the fast-growing region will provide a critical platform for growth in the country.”
AC Energy’s presence in Myanmar is timely, given the huge demand for power in Myanmar.
“Supply of electricity is one of the largest opportunities in Myanmar and also one of the biggest bottlenecks for economic development. We are excited to have AC Energy as our partner to drive sustainable and inclusive economic growth.
“AC Energy’s international expertise in the renewable-energy sector and the access to funding will be invaluable as we work together to service this huge, underserved market in Myanmar,” said Melvyn Pun, Yoma Strategic chief executive officer.
The World Bank estimates that electricity consumption in Myanmar will grow at an average annual rate of 11 percent until 2030 to achieve complete electrification in all households with an expected investment of around $2 billion per year required.
The Myanmar government’s energy master plan envisions solar power contributing up to 5 percent of the nation’s electricity as the country shifts away from hydropower and natural gas sources. “The renewable-energy sector is a scalable business which has the potential to generate a sizeable revenue stream with recurring cash flow to complement Yoma Strategic’s core businesses.”
Myanmar has one of the lowest electrification rates in Asia, with more than 60 percent of the population without access to grid electricity, particularly in rural areas. “There is a need to significantly increase generation capacity and build out last-mile distribution infrastructure, which Yoma Micro Power has embarked upon,” added Pun. Yoma Strategic currently holds 35 percent, while Norfund and IFC hold 30 percent each in Yoma Micro Power. The remaining 5 percent is held by Alakesh Chetia.
The impending joint venture is planned for 2020.
