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HK's Plus Renewables interested in Malaysia Solar Tenders

02 August 2019 I 08:27UTC
Author: Celine Ge

Inframation News: Hong Kong-based Plus Renewables is looking to bid in solar tenders in Malaysia as it ramps up its business in emerging Asia.

The company, which owns California-based renewable asset manager Radian Generation, is teaming up with local partners for greenfield utility-scale solar opportunities in Malaysia, Chief Executive Paul Cheng told Inframation. Local banks have shown interest in potential project lending, he added.

Plus' interest in Malaysia comes at a time when the country's Large Scale Solar (LSS) programme - which awards 1MW-100MW projects through public tender - is attracting local and international investors including IL Energy, Cypark Resources, and Hong Kong conglomerate Shun Hing Group. The Malaysian government aims to increase its renewable ratio to 20% from the current 2% by 2025 with the addition of about 4GW of new capacity.

Malaysia is currently inviting bids for its third LSS round that will grant a combined 500MW of projects. Local regulations stipulate that foreign entities involved in a consortium bid cannot have a stake that is larger than 49%. The RFP submission deadline is 19 August.

Vietnam option
Plus Renewables, established in 2012 by a team of finance veterans, is also monitoring Vietnam for possible entry. Acknowledging that the country's grid infrastructure is a concern, Cheng is waiting for more policy clarity in the government's upcoming new Feed-in-Tariff regime for 2019-2021 - especially in regard to a proposed direct PPA mechanism.

"Sustainability in cash flows" is a key consideration for Plus when pursuing projects in Asia, said Cheng, who is a former Asian Development Bank official and ex-managing director of Delta Associates in Thailand. The company will also look at rooftop solar opportunities with industrial and commercial clients in China's prosperous eastern regions, such as Jiangsu.

The company originates, builds, structures financing and manages renewable assets for global financial institutions, private equity and infrastructure funds, as well for as companies with strong credit ratings. It oversaw more than 300 projects in 17 states in the USA, Canada, Jamaica, Mexico and Australia as of July last year.

Hiring plan
As part of the effort to build up its Asia pipeline -- where the demand for renewable electricity is growing - Plus could also look to more than double its headcount in the region in the coming year, Cheng said.

The ongoing push into Asia renewables is also in the wake of growing interest in this asset class from long-term asset owners including Asian pension funds, sovereign wealth funds, insurers and other Western institutional investors.

In June, Plus, which adopts a build and sell model, entered Taiwan's renewable sector through a joint venture with local peer W Energy to build, finance, operate and maintain various types of renewable assets, including rooftop, floating and ground mounted solar, as well as small onshore wind projects.

In the next two years, the new platform will target a 200MW pipeline, most of which will be large ground-mounted facilities. It could use equity to fund construction, while taping local lenders for Taiwan dollar-denominated project loans after the projects commence commercial operations. Typically, a solar farm in Taiwan is 75%-80% financed through debt, according to Plus Chief Investment Officer Rudi Tsai.