SINGAPORE (Oct 14): Yoma Strategic Holdings is forming a partnership with Philippines-based AC Energy, Inc. to explore renewable energy projects in Myanmar.

The 50:50 joint venture will invest at least US$30 million ($41.1 million) in Yoma Micro Power (YMP), with the aim of developing around 200 megawatts of additional renewable energy projects within Myanmar, including participation in large utility scale renewable projects.

Yoma Strategic – which also has real estate, consumer, automotive and financial services investments in Myanmar – currently holds 35% in YMP, which builds micro power plants and mini-grids to provide electricity to off-grid rural communities and telecommunications towers in the country.

The remaining 65% stake in YMP are held by private equity firm Norfund and IFC of the World Bank Group with 30% stake each while the remaining 5% is held by YMP managing director Alakesh Chetia.

Post investment and restructuring, which is planned for 2020, the Yoma-AC Energy partnership is expected to hold at least 50% ownership of YMP.

YMP completed a 10-site pilot project in 2018 and is rolling out 250 micro power plants by end-2019. More than 2,000 sites are also expected by 2023.

In its Monday filing, Yoma Strategic chief executive Melvyn Pun said the supply of electricity is one of the largest opportunities and biggest bottlenecks for Myanmar’s economic development.

Says Pun: “We are excited to have AC Energy as our partner to drive sustainable and inclusive economic growth. 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.”

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

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

He also noted that Myanmar has one of Asia’s lowest electrification rates, with more than 60% of the population lacking access to grid electricity.

“There is a need to significantly increase generation capacity and build out last mile distribution infrastructure, which Yoma Micro Power has embarked upon,” adds Pun.

Myanmar is one of the fastest-growing energy markets in Southeast Asia. According to World Bank estimates, electricity consumption in Myanmar will grow at an average annual rate of 11% until 2030 to achieve complete electrification in all households, which requires an expected investment of around US$2 billion per year.

Year to date, shares in Yoma Strategic are down 3 cents to 32 cents.