Yoma to enter JV with AC Energy for Myanmar renewable energy projects

Singapore two-dollar bills

Correction: This article has been updated to correct the currency of the joint venture’s investment into Yoma Micro Power; the currency is U.S. dollars.

Yoma Strategic has entered a tie-up with Philippine conglomerate Ayala Corp.’s energy platform, AC Energy, to develop renewable energy projects in Myanmar via Yoma Micro Power (S), the two companies said in a filing to SGX Monday.

Under the deal, Yoma and AC Energy will set up a 50:50 joint venture which is expected to invest at least US$30 million into Yoma Micro Power, the filing said.

The joint venture will look to develop around 200 megawatts of renewable energy projects, including large utility-scale ones, the companies said.

Currently, Yoma Strategic owns 35 percent of Yoma Micro Power, while Norfund and the IFC hold 30 percent each and Alakesh Chetia, Yoma Micro Power’s managing director, holds 5 percent, the statement said.

After the investment and restructuring, the Yoma-AC Energy joint venture is expected to hold at least 50 percent of Yoma Micro Power, the statement said.

“Supply of electricity is one of the largest opportunities in Myanmar and also one of the biggest bottlenecks for economic development,” Melvyn Pun, CEO of Yoma Strategic, said in the statement. “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.”

Pun added that the renewable energy business is “scalable,” and can generate a sizeable revenue stream with recurring cashflow.

He noted Myanmar has one of Asia’s lowest electrification rates, with more than 60 percent of the population lacking access to grid electricity.

A June World Bank report estimated Myanmar’s electricity consumption will grow at an average annual rate of 11 percent through 2030, to reach complete electrification of all households, with around US$2 billion worth of investment needed, the statement said.

Patrice Clausse, COO of AC Energy Renewables, said the deal was a step toward her company’s 2025 goals.

“This is a very meaningful investment for AC Energy, as we intend to participate in Myanmar’s renewables sector in a significant way,” she said in the statement. “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.”

Yoma Micro Power builds micro power plants and mini-grids to provide electricity to off-grid rural communities, and provides telecommunications towers in Myanmar, the statement said.

After completing a 10-site pilot project in 2018, Yoma Micro Power is rolling out 250 micro power plants by end-2019, with more than 2,000 sites expected by 2023, the statement said.

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