Singapore-listed Yoma in tie-up with Ayala unit for renewable energy projects in Myanmar

SINGAPORE – Myanmar-focused Yoma Strategic Holdings said on Monday (Oct 14) it will form a strategic partnership with AC Energy, the energy platform of Philippine conglomerate Ayala Corporation.

The two companies are looking to establish a 50:50 joint venture (JV) to scale up Yoma Micro Power (S) Pte Ltd (YMP) and to explore developing around 200 megawatts of additional renewable energy projects within Myanmar, which will include participating in large utility-scale renewable projects.

As part of this transaction, Yoma Strategic and AC Energy have signed a binding term sheet for the new JV to invest at least US$30 million (S$41.2 million) into YMP.

YMP builds micro power plants and mini grids that provide electricity to off-grid rural communities and telecommunications towers in Myanmar. It is rolling out 250 micro power plants by the end of 2019 and is expected to scale up to more than 2,000 sites by 2023.

Yoma Strategic owns a 35 per cent stake in YMP, while the International Finance Corporation (IFC) and Norway’s private equity firm Norfund each hold 30 per cent. The remaining 5 per cent is held by YMP’s managing director Alakesh Chetia.

After the investment and restructuring, which is planned for 2020, the JV is expected to hold at least 50 per cent of YMP.

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

“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,” Mr Pun added.

Under the Myanmar government’s energy master plan, solar power is projected to contribute up to 5 per cent of the country’s electricity by 2030, as Myanmar shifts away from hydropower and natural gas resources, Yoma Strategic noted.

The renewable energy sector is a scalable business with the potential to generate a sizeable revenue stream with recurring cash flow to complement Yoma Strategic’s core businesses, Mr Pun said.

“There is a need to significantly increase generation capacity and build out last mile distribution infrastructure (in Myanmar), which Yoma Micro Power has embarked upon,” he added.

The partnership is also a step towards AC Energy’s 2025 goals, according to Patrice Clausse, chief operating officer of AC Energy Renewables.

“We intend to participate in Myanmar’s renewables sector in a significant way. 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,” Mr Clausse said.

Shares of Yoma Strategic closed unchanged at 32.5 cents on Friday.

The mainboard-listed group has businesses in real estate, consumer, automotive and heavy equipment, financial services and investments in Myanmar.