Under the agreement, ACCIONA will acquire nearly a 50% stake in Singapore-based wind developer The Blue Circle and become its largest individual shareholder. The transaction includes an investment of $34 million for ownership in The Blue Circle and a commitment of up to $113.5 million to finance capex of projects that reach ready-to-build status. The partnership marks ACCIONA’s entry into the Southeast Asian renewables market.
The Blue Circle has 84 MW of wind projects in operation and a 3.8 GW pipeline in Vietnam, Thailand, Philippines, Cambodia, Indonesia, Laos and Sri Lanka, of which 1.4 GW are in advanced stages of development. The company was founded in 2013 and has offices in Singapore, Vietnam, Bangkok, Cambodia, and Philippines. The entry of ACCIONA as a shareholder strengthens The Blue Circle's access to project financing and helps to accelerate the buildout of its portfolio of assets.
ACCIONA’s move to tap the Southeast Asian renewables market coincides with an observed surge in investor interest in the region’s renewables segment. According to Enerdatics’ research, countries in Southeast Asia have witnessed the largest year-on-year growth in strategic partnerships and deals for renewable generating assets in Asia, in 2021. Transaction activity during the period grew by a staggering 2.3X, led primarily by Vietnam, Philippines and Indonesia. The trend is further magnified in 2022, with 27 GW of deals announced year-to-date primarily targeting the utility-scale wind and solar sectors. Vietnam continues its dominance as one of Asia’s strongest growth markets for clean energy assets, with more than 5 GW of transactions announced, including the recent $1 billion purchase of the Denham Capital-backed Nexif Energy’s 2.7 GW portfolio of onshore wind, solar and hydropower assets. The largest deal in the region, by capacity, is a 2022 partnership between Phillippine-based Ayala Corp and Indonesia’s Puri Usaha Group to develop 13 GW of solar and battery storage assets in Indonesia.
Modelling in a new report by Finnish manufacturing and services company Wärtsilä, found that Southeast Asian countries could lower the levelised cost of electricity (LCOE) by more than 20%, when taking into account likely future carbon taxes, by reaching net-zero by mid-century. The report states that the region is experiencing unprecedented fuel price increases and volatility, a year-on-year rise in power demand, and a massive exposure to intensifying extreme weather events due to climate change. Investments targeted at a combination of renewables plus flexibility, provided by balancing engines and energy storage, can reliably meet the increasing power demand. The report highlighted Vietnam, Indonesia and the Philippines as the major drivers of renewables growth in the region, estimating that a net-zero energy system in these countries could cost up to 23% less than a business-as-usual scenario (under which fossil generation is not phased out to restrict emissions) by 2050.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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