AC Energy bullish on Indonesia

AC Energy bullish on Indonesia

AC ENERGY Holdings, Inc. is bullish about its entry into the energy sector
of Indonesia as it expects its investments in the regional neighbor to
account for at least 20% of its earnings in the coming years.

"Over time, a country like Indonesia can contribute probably, orders of
magnitude, 20% of our bottom line," John Eric T. Francia, AC Energy
president and chief executive officer, said on the sidelines of the
BusinessWorld Economic Forum at Shangri-La at the Fort, Bonifacio Global
City on Friday.

"It will be meaningful," he said, but declining to give the year when the
Ayala Corp. subsidiary would start registering returns on its investments.

In April, AC Energy and its joint venture partners completed the acquisition
of Chevron Corp.'s geothermal assets and operations in Indonesia, further
boosting AC Energy's renewable energy portfolio in that country after
earlier investing in a wind farm.

The Chevron deal gave AC Energy a 19.8% stake in the 637-megawatt (MW)
geothermal steam and power capacity in Darajat and Salak geothermal fields,
along with its 75% stake in the 75-MW wind farm project in Sidrap, South
Sulawesi. These acquisitions more than doubled the company's clean energy
capacity to at least 264 MW.

Mr. Francia said the Indonesian investments would not contribute yet to the
company's earnings for 2017, which he described as a "partial and transition
year" for the regional foray.

"There's a lot of accounting distortions typically on a first year of a
post-acquisition," he said.

"But the big picture over time, I think Indonesia as a whole could
contribute upwards of 20%," he said. "I couldn't give you a timeline of when
that 20% could be achieved. To give you a sense, it's not gonna be 3% or 5%.
It's not gonna be 50%. It's somewhere along 20%."

The consortium Star Energy Geothermal (Salak-Darajat) B.V., in which AC
Energy has a 19.8% economic stake, won the bid for the assets in December
last year in an auction that was also participated in by other power
developers from the Philippines.

OPPORTUNITIES IN VIETNAM

Mr. Francia said AC Energy was also keen on investing in Vietnam, although
the company was still in the "scoping" phase for opportunities.

"But we're talking to potential partners in Vietnam," he said. "We haven't
zeroed in on anyone. We're talking to multiple companies."

The AC Energy official described the companies as mainly Vietnamese
businesses that match AC Energy's search for a "strong local partner."

"The advantage with Vietnam is we already have a presence in water, we also
have an investment in an infrastructure company. So we're tapping also those
networks that we already have in adjacent infra industries," he said.

Ideally, Mr. Francia said AC Energy targets to invest in a "platform," which
he described as a company with organizational capabilities, has a portfolio
of projects or projects in the pipeline.

But failing that, he said the company would consider investing in specific
projects in Vietnam or a single asset.

AC Energy's expansion comes as it targets to reach by 2020 around 2,000 MW
of attributable capacity -- or the equivalent in megawatts of its economic
stake in various projects. It reached 1,000 MW in 2016, with renewable
energy accounting for less than 10%.

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Link to Original Article:
http://www.bworldonline.com/content.php?section=Corporate&title=ac-energy-bu
llish-on-indonesia&id=145504

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com