Securing financing to accelerate Southeast Asia’s clean energy future

How can solar project investors have a view on future revenues in a region with diverse markets?

Cleantech Solar delivers renewable energy solutions to commercial and industrial customers across Asia. With a strong pipeline of projects and an established reputation for quality and agility, the business has been expanding its footprint across the region’s fastest-growing economies. But scaling up required significant capital.

In assessing the financing of Cleantech Solar’s portfolio in Southeast Asia (SE Asia), lenders sought to have a robust understanding of the risks that could affect the solar projects and their revenues across multiple SE Asia countries, each with its own political, economic, regulatory and power market dynamics. Given Baringa’s credibility with international lenders, Baringa was appointed to bring energy price modelling expertise and local market insights to support on this financing process. 

Understanding the revenue drivers in each market

To provide a clear view of the risks and opportunities, experts from our Asia-Pacific energy markets team ran workshops for Cleantech Solar and the lenders, unpacking the outlook for retail electricity tariffs across five of the key Southeast Asian markets in Cleantech Solar’s portfolio – Singapore, Vietnam, Malaysia, Indonesia and Thailand. Our briefings included an overview of commercial issues, key challenges in the market and expected regulatory changes. We also utilised our fundamental-based projected retail electricity tariffs to provide an outlook of expected future revenue streams for the portfolio. By grounding our analysis in both current market conditions and forward-looking projections, this provided assurance to all parties by enabling informed discussions about revenue potential and policy exposure.

Our team also conducted a detailed review of the multiple power purchase agreements as well as the financial models underpinning Cleantech Solar’s portfolio. We identified and assessed the key drivers of revenue assumptions, identifying key risks and providing suggestions. We summarised these findings in a red flag review report, giving lenders validation on financial assumptions. 

Unlocking green finance to help scale clean energy

By giving their lenders confidence that they understood the macro and market-specific risks, Cleantech Solar successfully secured two milestone green financings totalling more than USD140 million. This funding is now enabling the company to accelerate its growth towards 2.5 GWp of clean energy capacity across the region.