Armstrong Asset Management has raised its first clean energy fund. A total of ten investors from Europe, North America and Asia have made capital commitments to the Armstrong South East Asia Clean Energy Fund since the fund held its first close in August 2012.
Armstrong Asset Management (“AAM”) announces that its first clean energy fund – uniquely focused on the development and construction of small-scale infrastructure projects in emerging Southeast Asia – has been successful in garnering robust support from investors. A total of 10 investors from Europe, North America and Asia have made capital commitments to the Armstrong South East Asia Clean Energy Fund (“Armstrong fund”) since the fund held its first close in August 2012. The private equity fund is now the largest operational clean energy infrastructure fund dedicated to providing development capital to the emerging markets of Southeast Asia.
“We’re delighted and grateful for the keen support of our investors, in particular the confidence they’ve placed in the Armstrong team’s experience, our investment strategy, and the shared belief of achieving target financial returns with the integration of ESG best practices,” said Andrew Affleck, Managing Partner, Armstrong Asset Management.
“Our investors appreciate the fund’s geographic focus on Southeast Asia. The region has been under allocated in terms of Clean Energy PE, but the success of the fundraising is also driven by the respective markets evolving policy framework, obvious market demand and the growing pipeline of mature deal opportunities,” commented Mr Affleck.
For the final close, the Singapore-headquartered firm received additional commitments from two new investors PROPARCO, the private sector arm of the Agence Française de Développement (AFD), and Unigestion, a Geneva-based privately owned asset management company; as well as increased support from existing investors of the fund. With the additional commitments totalling US$33m, the fund has achieved a final close on US$164m, exceeding the initial target fund size of US$150m.
The fund’s investors are the International Finance Corporation (IFC) of the World Bank, development finance institutions GEEREF, DEG, FMO and PROPARCO; asset managers IFC AMC, Obviam and Unigestion; an Asian-based corporation, and the Armstrong management team itself.
Said Marie-Hélène Loison, Proparco Deputy CEO, “We are delighted to participate in the final closing of Armstrong South East Asia Clean Energy Fund and to support its unique focus on small-scale clean energy projects. Southeast Asia’s renewable energies and resource efficiency markets are supported by strong economic fundamentals, but still lack equity financing. The Armstrong fund will thus play a strong catalytic role in these markets, and its commitment to positive social and environmental impact will improve awareness of these issues. We are confident the Armstrong team will be successful in building a strong portfolio in this supportive context.”
From Unigestion, Hanspeter Bader, Head of Private Equity said, “Unigestion’s participation in the Armstrong fund reflects our continued commitment to identify and invest in the most promising environmental sustainability sub-sectors. Many new companies are evolving to manage existing resources and deliver alternative energy sources that will benefit from private equity funding and create exceptional long-term strategic opportunities for investors.”
So far, Armstrong has made two investments from the new fund. In August, the firm announced a capital commitment of up to US$30m to Annex Power from the fund to finance the development of a pipeline of solar PV and biogas power projects in Thailand, Indonesia and the Philippines. Earlier in May, the firm announced it would take a 60% equity interest in Symbior Elements to develop and operate a 30MW portfolio of solar photovoltaic (PV) power projects in Thailand, alongside Hong Kong-based energy company, Symbior Energy.
The Armstrong fund will implement its strategy of targeting small-scale renewable energy and resource efficiency projects in Southeast Asia’s emerging markets, in particular the solar, hydro, wind and biogas sectors in Thailand, Philippines, Indonesia and Vietnam. The strategy applies a differentiated model to create attractive portfolios of operational infrastructure projects that meet a need in the region characterized by high energy demand and strong market fundamentals.
During its ten-year lifespan, the Armstrong Fund will make about 10 to 15 investments with developer businesses. With the current fund size the allocation to each deal can range from US$5m to US$25m, but this can increase further with co-investment. Typical individual projects will be small-scale infrastructure projects with the ability to generate long term cash flows and the capacity to deliver up to 10MW in power from renewable resources.
Issued by H2PC Asia on behalf of Armstrong Asset Management
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