Ayala Corp. sets RE expansion in Myanmar

This is a very meaningful investment for AC Energy, as we intend to participate in Myanmar’s renewables sector in a significant way

AC Energy Inc., the power arm of conglomerate Ayala Corp., is looking to expand its renewable energy (RE) portfolio in Myanmar.

In a disclosure to the Philippine Stock Exchange on Monday, Ayala Corp. said AC Energy, along with partner Yoma Strategic Holdings Ltd., will invest at least $30 million or P1.5 billion in Yoma Micro Power.

Ayala Corp. said the joint venture will explore the development of a 200-megawatt (MW) of additional renewable energy projects in Myanmar and participate in large utility scale renewable projects.

“This is a very meaningful investment for AC Energy, as we intend to participate in Myanmar’s renewables sector in a significant way,” AC Energy Renewables chief operating officer Patrice Clausse said.

“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,” she added.

For his part, Yoma Strategic chief executive officer Melvyn Pun said: “Supply of electricity is one of the largest opportunities in Myanmar and also one of the biggest bottlenecks for economic development.”

Pun said AC Energy’s international expertise in the renewable energy sector and the access to funding will be invaluable to service the largely underserved market in Myanmar.

“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,” Pun said.

The World Bank forecasts Myanmar’s energy consumption to post an average annual growth rate of 11 percent until 2030 and achieve complete electrification in all households with an expected investment of around $2 billion per year.

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. In addition, the Myanmar government’s recent hike in electricity tariffs has also enhanced the attractiveness of solar energy solutions to the commercial and industrial segment.

Yoma Strategic currently holds 35 percent, while Norfund and International Finance Corp. hold 30 percent each in Yoma Micro Power. The remaining 5 percent is held by Alakesh Chetia.

Post the investment and restructuring, which is planned for 2020, the joint venture is expected to hold at least 50 percent of Yoma Micro Power.