Armstrong Asset Management is to help fund the construction of mini hydropower schemes totalling 50MW in Indonesia.
Armstrong's South East Asia Clean Energy Fund has agreed to commit up to US$22.5 million to develop and operate the portfolio of plants being developed by PT Inti Duta Energi (IDE), the mini-hydro development subsidiary of Jakarta-listed construction company PT Nusa Konstruksi Enjiniring Tbk (NKE).
Currently, the developer has a pipeline of well over 50MW worth of projects in various stage of permitting process. The first project of 5MW output is located in Java and is expected to be operational by the second quarter of 2016, followed by an additional three projects totalling 21MW output located in Sumatra by the end of 2016.
“We are very pleased to announce this partnership with NKE Group. We look forward to building on our excellent working relationship with the IDE team whose project development and technical capabilities are well recognized in mini-hydro market in Indonesia," said Michael McNeill, Partner of Singapore-based Armstrong Asset Management. "Together with NKE group's proven strong project management, engineering and construction capabilities, we expect to deploy our capital rapidly to deliver high-quality mini-hydro assets to support sustainable development of Indonesia."
Djohan Halim, President Director of PT Inti Duta Energi welcomed the partnership and investment plan. "It is great to establish this synergy with Armstrong Asset Management. We share a commitment to the potential and the need for rapid growth in the development of clean, efficient and low risk energy solutions. The experience of the Armstrong team in small-scale infrastructure investment in South East Asia is a powerful complement to our activities in Indonesia."
Armstrong closed its Clean Energy Fund when it reached US164 million last November. Prior to the latest deal, it has made three investments from the fund: a capital commitment of up to US$30 million to Annex Power for solar and biogas projects in Thailand, Indonesia and the Philippines; an equity stake in Symbior Elements to develop a portfolio of solar generation in Central and Northeast Thailand, and a capital commitment of up to US$ 40 million to The Blue Circle for wind and solar projects in Mekong Region.
Indonesia has some of the largest renewable energy resources in South East Asia with sustained long term growth in power demand. After the revision of feed-in-tariff system announced recently, Indonesian mini-hydro has now become one of the most attractive renewable energy sectors in South East Asia.
In April this year, Armstrong also announced a partnership with Mandiri Investment Management to work together to invest in renewable energy projects, starting from the mini-hydro sector in Indonesia.
