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Armstrong Sees Asia Fund Attracting $1.2 Billion to Clean Energy

Armstrong Asset Management, a Singapore-based private-equity company, expects investments from its first Southeast Asian clean-energy fund to total as much as $1.2 billion.

The fund will focus on the Philippines, Indonesia and Thailand where renewables policy support is “more advanced,” Armstrong Managing Partner Andrew Affleck said by e-mail. While chiefly interested in solar and mini-hydropower, it’s looking at about 30 projects that also span wind and energy efficiency.

Armstrong is seeking to exploit the growing market for renewables in Southeast Asia as more countries cement targets for emission reductions and incentives for clean-power output. Thailand in July started premium payments, or feed-in tariffs, for solar energy, a system already in place in Malaysia and the Philippines. In June Indonesia opened a solar auction program.

The company’s interest in the region is driven by the “clear need for capital and the gap in the market,” Affleck said. Government targets for clean power and policy measures to strengthen energy security amid rising costs for fossil-fuel power also make the countries attractive, he said.

Armstrong raised $164 million for the fund last month. That, combined with $164 million equity from other fund investors, about $70 million from developers and $800 million in project finance, represents about $1.2 billion of investment, Affleck said. It’s aiming for annual returns of about 20 percent.

The fund will probably invest in small hydropower in the first quarter in either the Philippines or Indonesia or both, Affleck said. It has already made two investments, in Annex Power Ltd. to finance the development of solar and biogas facilities, and in Symbior Elements Pte Ltd. for solar farms.

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