The ASEAN region (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) exhibits many important drivers for the successful generation of solar power and is, therefore, one of the prime regions for renewable energy (RE) investors, who would like to position themselves in one of the most promising early-stage growth regions for solar energy. These include:
- High electricity demand: In 2020, ASEAN member countries had a combined population of approximately 673 million, 8.4% of the world’s population and a combined nominal GDP of more than USD 3.11 trillion, with a growth rate of >5% p.a. over the past decade.
- Need for additional power generation capacity: Compared to industrialized countries, the ASEAN region has a much greater demand for additional power capacity, with many parts remaining unelectrified. Power generation capacity has grown on average more than 6% during the past 20 years, with renewable sources exceeding this rate. According to Apricum’s internal forecast, solar energy capacity in the ASEAN member countries is expected to increase from 23.1 GW in 2020 to 75.6 GW by the end of 2025.
- High global horizontal irradiation (GHI) levels: Annual GHI levels across the ASEAN regions are in general remarkably high, with most areas exhibiting GHI levels > 1,600 kWh/m2. The lowest levels of around 1,000 kWh/m2 can be found in Northern Vietnam and the highest levels in Southern Indonesia reaching GHI levels > 2,000 kWh/m2.
- High generation costs: The power generation structure in ASEAN is still characterized by its strong reliance on fossil sources. This results in high power generation costs, which are partially reflected in the consumer price levels for electricity or government subsidies necessary to maintain acceptable price levels for consumers. While renewables accounted for around 38% of power generation in Europe in 2020, in ASEAN this number was less than 20% with fossil generation from coal, gas, and oil comprising more than 80%.
Therefore, the rather younger ASEAN solar energy markets, with their country-specific differences, display a greater potential for growth than more mature markets such as Europe or the USA. The current key markets for solar power are Vietnam, Malaysia, Thailand, the Philippines, and Indonesia, which also account for more than 87% of ASEAN’s population.
The solar M&A scene is most active in Thailand and Vietnam – the countries with the highest installed capacities in the ASEAN region. In Thailand (the oldest market), local players are taking the lead while international players are increasing their involvement. These markets also exhibit favorable conditions for FDI, allowing full foreign ownership of such assets. Competition levels are still lower than in mature markets and good acquisition deals are achievable. Project risk is country-specific and ranges from medium to low, depending on the off-taker and framework the project was erected under.
In the following, we profile the most established solar power markets in the ASEAN region and summarize recent M&A activity.
Solar Market Profile: Vietnam
Solar Power Policies & Targets
A new National Power Development Plan VIII (PDP 8) for the period of 2021–2030, with a vision to 2045, is awaiting approval and presents a shift towards RE expansion. The solar capacity target is 17 GW by 2025, (around 17% of total installed capacity), up to 20 GW in 2030 (around 14% of total installed capacity), and by 2045 solar and wind power are to comprise around 42% of total installed capacity. Currently, around 16.45 GW of solar generation capacity has been installed.
The mainly government-controlled solar power market in Vietnam, when dispatching to the state-owned utility Electricity of Vietnam (EVN), is governed by capacity quota targets announced in the PDP. Bilateral agreements with EVN are not possible under current regulations, while sales of electricity models under private PPAs in the private sector are possible.
Solar Programs and Market
Past, current, and future solar programs announced:
a) 2016: FiT program at 2,086 VND/kWh (equivalent to 0.09 USD/kWh) for 20 years for on-grid, rooftop, insular, off-grid, and net-metering models, with 4,460 MW commissioned by 31.06.2019. Projects in Ninh Thuan Province are allowed to reach COD by 31.12.2021 (30 solar power projects over 1,932.92 MW).
b) 2020: FiT extension at 1,758 VND/kWh (0.08 US cents/kWh) for floating and 1,620 VND/kWh (equivalent to 0.07 USD/kWh) for ground-mounted solar projects for 20 years (36 solar farms with a total accumulated capacity of around 2,988.9 MW were eligible). The rooftop tariff was fixed at 1,943 VND/kWh (equivalent to 0.084 USD/kWh) for 20 years.
c) 2020: Announce pilot auction scheme on hydropower plant dams of around 400 MW in two phases at hydro facilities belonging to the Da Mi Hydropower Joint Stock Co, a division of EVN.
d) 2020: Announced pilot synthetic DPPA scheme of 400–1,000 MW for 2020 (eligibility for registered projects >30 MW in areas with no grid congestion and developers with proven technical and financial capabilities) with certain registered private sector buyers.
e) 2020: Competitive selection mechanisms are envisioned for future utility-scale solar power. A framework for both substation- and solar-plant-based auctions is under development with the support of the World Bank. The timeline for implementation is to be announced.
Solar market outside of government programs:
Due to the relatively high electricity tariffs (around 0.08 USD/kWh for the manufacturing industry and 0.12 USD/kWh for business connected to < 22 kV during daytime when solar power is generated) compared to potential solar LCOEs, there is substantial interest for commercial and industrial (C&I) as well as residential consumers in lowering their electricity bills. Private PPAs for commercial and industrial consumers, operational lease or other similar business models are starting to gain traction in the market and similar growth in this market segment, as in Thailand having a highly active C&I segment, can be expected. This process is supported by the current lack of a rooftop RTS FiT Phase, leading to a shift in focus from FiT to corporate PPA developments.
Solar capacity forecast scenarios:
Solar M&A activity and key solar power acquisitions in Vietnam
Vietnam’s M&A scene has been rather slow so far with further utility-scale brownfield acquisitions being hindered by multiple factors such as COVID, ongoing curtailment to be resolved only after expansion of Vietnam’s transmission line network, and lack of non-recourse financing, among others. As further utility-scale installations will be developing slowly under competitive mechanisms, activities in this segment are expected to remain at a lower level. The high installed capacity accounts for 71% of the total 23.09 GW of current operational solar power plants in ASEAN, and is nevertheless, besides the shortcomings of the PPA, deemed to make Vietnam’s M&A scene the liveliest among the ASEAN countries.
Due to around 9.3 GW of rooftop solar power plants becoming operational by end of 2020 (majority under FiT with minority under corporate PPAs and FiT), there is growing interest from developers to divest these assets and find financing partners for further project development, which will increase market traction.
No foreign ownership restrictions on power generating assets exist in Vietnam, making the market attractive to foreign investors, which besides Thailand is one of the most active solar M&A environments in ASEAN.
Examples of recent M&A activities in Vietnam’s solar power landscape:
| Buyer / Country | Seller / Target Project | Transaction Details | Timing of Acquisition | Project(s) Capacity | Project Location(s) |
| HNG Capital Group / Malaysia | Undisclosed (a company listed on the Ho Chi Minh City Stock Exchange) | % of stakes of acquisition undisclosed
HSBC being sole lender for acquisition |
Announced in Mar, 2021 | 330 MW | Undisclosed |
| TNB Renewables / Malaysia | Sunseap | Acquisition of 39.5% of stakes in rooftop portfolio with 5 projects | Announced in Mar, 2021 | 21.6 MW | Undisclosed |
| Gungkul Engineering / Thailand | Bangjak Green Energy and 2 Vietnamese individuals / Phong Dien II Solar Power Plant | Acquisition of 100% of stakes in ground-mounted plant under FiT Phase 2 | Dec, 2020 | 50 MW | Thua Thien Hue Province |
| BC Container Glass
/ Thailand |
Solar Power Management (Thailand) / Xuan Tho 1 & 2 Solar Power Plants | Acquisition of 12.86% of stakes in ground-mounted plant under FiT Phase 1 | Sep, 2020 | 99.2 MW | Phu Yen Province |
| Super Energy / Thailand | Hung Hai Group / Loc Ninh Solar Power Plants 1-4 | Acquisition of 70% of stakes in ground-mounted plant under FiT Phase 2 | Mar, 2020 | 550 MW | Binh Phuoc Province |
Solar Market Profile: Thailand
Solar Power Policies & Targets
Under the 2018–2037 Power Development Plan (PDP), Thailand currently foresees a target of 15,574 MW of solar power generation capacity until 2037. The target is divided between the household rooftop scheme at 10,000 MW, 2,725 MW for floating solar farms at nine dams operated by EGAT, and future utility-scale projects under competitive bidding mechanisms, with details to be announced. Currently, around 3.12 GW of solar generation capacity has been installed.
The mainly government-controlled solar power market in Thailand, when dispatching to the state-owned utilities (Energy Generating Authority of Thailand (EGAT), Provincial Electricity Authority (PEA), and Metropolitan Electricity Authority (MEA)), is governed by capacity quota targets announced in the Power Development Plan (PDP) and Alternative Energy Development Plan (AEDP). Bilateral agreements with the state-owned utilities are not possible under current regulations, while sales of electricity models under private PPAs or operational lease models in the private sector are possible and common practice. Fiscal incentives including foreign land ownership are still provided under Board of Investment Promotion.
Solar Programs and Market
Past, current, and future solar programs announced:
a) 2007: Adder program (adder is paid on top of utility’s wholesale tariff) at 8.0 THB/kWh (equivalent to 0.25 USD/kWh) for 10 years with a solar target of 500 MW until 2022.
b) 2009: Adder program (adder is paid on top of utility’s wholesale tariff) at 6.5 THB/kWh (equivalent to 0.21 USD/kWh) for 10 years and extended solar target of 2 GW until 2021.
c) 2013: Solar target increases to 3 GW: 200 MW rooftop solar at a FiT of 6.96 THB/kWh (equivalent to 0.21 USD/kWh) for installations < 10 kW, 6.55 THB/kWh (equivalent to 0.21 USD/kWh) for installations 10 kW– 250 kW, and 6.16 THB/kWh (equivalent to 0.20 USD/kWh) for installations 250–1,000 kW for 25 years, later abandoned community solar program of 800 MW at a FiT of 9.75 THB/kWh (equivalent to 0.31 USD/kWh) years 1–3, 6.5 THB/kWh (equivalent to 0.21 USD/kWh) years 4–10, and 4.5 THB/kWh (equivalent to 0.14 USD/kWh) years 11–25, and 2 GW for adders as per (b).
d) 2015: Pilot project of 100 MW for rooftop solar for self-consumption.
e) 2015: Phase 1 of the 5 MW FiT program with agricultural cooperatives and government agencies of 600 MW at 5.66 THB/kWh (equivalent to 0.18 USD/kWh) for 25 years, later reduced to agricultural cooperative portion of 300 MW.
f) 2017: Phase 2 of the 5 MW FiT program with agricultural cooperatives and government agencies of 200 MW at 3.66 THB/kWh (equivalent to 0.12 USD/kWh) for 25 years in 2017.
g) 2017: Later discarded “firm hybrid” tender of 300 MW at 3.66 THB/kWh (equivalent to 0.12 USD/kWh) for 20 years in 2017.
h) 2018: Later discarded “semi-firm” tender of 269 MW.
i) 2019: Later discarded rooftop FiT program with 100 MW at 1.68 THB/kWh (equivalent to 0.05 USD/kWh) for 10 years, later discarded and converted to Energy-for-All program, which was also discarded.
Solar market outside of government programs:
Due to the comparably high electricity tariffs (around 0.12 USD/kWh for businesses during daytime when solar power is generated), there is strong interest for commercial and industrial as well as residential consumers in lowering their electricity bills. Private PPAs or related models for commercial and industrial consumers are allowed under Thai laws and regulations and have become widespread, besides self-investment of these consumers, with the Thai C&I market being the most mature and competitive in ASEAN. For corporate PPAs, the most common model applied is a discount on the utility’s respective electricity tariff, with discounts for financially solid off-takers in Q1/2021 in many cases exceeding 50% for PPAs with 20-year tenures. Tenures from 12 to 30 years are offered as well as minimum performance or even generation guarantees for the consumer.
Solar capacity forecast scenarios:
Solar M&A Activities and FDI
Thailand’s solar M&A scene, which is one of the most active environments in ASEAN due to the country’s relatively long history with solar, is somewhat limited to brownfield acquisitions in the utility-segment because of a lack of new utility-scale installations (although old adder licenses are still offered for sale, as well as in parts transfer restrictions on these licenses).
In the C&I segment, correlated to the growth of this market niche, a higher dynamic can be observed, with both greenfield and brownfield acquisitions by local and international IPPs constantly increasing in traction.
No foreign ownership restrictions on power generating assets exist in Thailand under Board of Investment promotion, making the market attractive to foreign investors.
Examples of recent M&A activities in the Thai solar power landscape:
| Buyer / Country | Seller / Target Project | Transaction Details | Timing of Acquisition | Project(s) Capacity | Project Location(s) |
| Ecoligo / Germany | RWE / SEA Rooftop Solar | Acquisition of 100% of stakes in C&I rooftop plant under corporate PPA of Xcellent’s factory | Nov, 2020 | 6 MW | Chonburi Province |
| BCPG / Thailand | Eternity Power / RPV Energy | Acquisition of 100% of stakes in portfolio of 4 ground-mounted plants: 5 MW + 5 MW + 10 MW, 15 MW under adder, 5 MW under FiT | Aug, 2020 | 20 MW | Lopburi, Prachinburi and Kanchanaburi Province |
| Global Power Synergy Public Company / Thailand | Brookfield Renewable Partners / N.P.S. Star Group Company Limited (NPS), World Exchange Asia Company Limited (WXA), and P.P. Solar Company Limited (PPS) | Acquisition of 100% of stakes in portfolio of 9 ground-mounted plants: 3.6 MW under adder, 35.9 MW under FiT
TerraForm Global Operating (Thailand): O&M company |
Mar, 2020 | 39.5 MW | Lopburi, Suphanburi, Phichit and Khon Kaen Province |
| The Megawatt / Thailand | Millcon Steel / Siam Solar Generation | Acquisition of 90% of stakes in ground-mounted project under adder | Apr, 2020 | 16.8 MW | Chaiyaphum Province |
Solar Market Profile: Malaysia
Solar Power Policies & Targets
To date, approximately 8% of Malaysia’s energy comes from renewable generation sources; in 2018 it announced a 20% renewable energy target by 2025. Currently, only around 1.39 GW of solar generation capacity has been installed with the projects of the third LSS round of 491 MW under construction.
Malaysia’s electricity market is partially liberalized, ongoing reforms are aiming to increase this. Engagements with one of the state-owned distribution companies Tenaga Nasional Berhad in Peninsular Malaysia, Sabah Electricity in the State of Sabah, and Syarikat Sesco Berhad in the State of Sarawak are regulated under government programs under the current Single Buyer Rules. Mechanisms to support solar energy growth include FIT, Net Energy Metering (NEM), and Large-Scale Solar tenders (LSS).
Solar Programs and Market
Past, current and future solar programs announced:
a) 2011: Solar Fit introduced and replaced late by LSS mechanism with the first LSS tender in 2016 of 200 MW in Peninsular Malaysia and 50 MW in Sabah. The capacity per project was between 1 MW to 50 MW.
b) 2017: Second LSS tender of 360 MW in Peninsular Malaysia and 100 MW in Sabah/Labuan. However, the maximum capacity per project was reduced to 30 MW.
c) 2020: Third LSS tender of 500 MW, which was slightly undersubscribed with a total of 491 MW of awarded projects.
d) 2020: Fourth LSS tender over 1 GW with pre-qualifications being announced in March 2021. 823.06 MW quota awarded to 30 players, 20 parties with 323.06 MW under package P1 (capacity 10–30 MW at tariffs of 0.1786–0.2481 RM/kWh (equivalent to 0.04–0.06 USD/kWh) for 21 years with COD latest end of 2023) and remaining 500 MW under package P2 (capacity 30–50 MW at tariffs of 0.1399–0.2388 RM/kWh (equivalent to 0.03–0.06 USD/kWh) for 21 years with COD latest end of 2023).
Solar market outside of government programs:
Due to the comparably higher electricity tariffs (around 0.09 USD/kWh for commercial and industrial consumers during daytime when solar power is generated), there is an ongoing interest for C&I as well as residential consumers in lowering their electricity bills. Corporate PPAs for commercial and industrial consumers or alternatively operational lease or other business models are increasing traction in the market.
Solar capacity forecast scenarios:
Solar M&A Activities and FDI
In general, recent M&A activities are slow due to the low installed capacity available and few ongoing developments, but nevertheless showing some recent transactions.
100% foreign company ownership in promoted sectors is possible but in LSS programs limited to 49% but including foreign land ownership, making it slightly more complicated for foreign investors to engage without local partner or corporate structuring.
| Buyer / Country | Seller / Target Project | Transaction Details | Timing of Acquisition | Project(s) Capacity | Project Location(s) |
| Pimpanan Ehsan Bhd / Malaysia | reNikola Sdn Bhd / reNIKOLA (Arau) Sdn Bhd, reNIKOLA (Gebeng) Sdn Bhd, reNIKOLA (Pekan) Sdn Bhd, reNIKOLA Solar Sdn Bhd and RE Gebeng BKH Sdn Bhd | Acquisition of portfolio of 5 ground-mounted projects | Feb, 2021 | 418 MW upon completion | Kedah, Pahang and Perlis |
| reNIKOLA Sdn Bhd / Malaysia | BayWa r.e. / Arau and Gebeng solar plants | Acquisition of 100% of stakes of 2 ground-mounted solar projects | Feb, 2021 | 5.2 MW + 39 MW | Perlis and Gebeng |
| BiON Suria (part of BiON Plc) / Malaysia | Motion Ventures Sdh Bhd | Acquisition of 77% of stakes of 2 ground-mounted solar projects | Dec, 2020 | 0.95 MW | Perak and Sabah |
| Taliworks Corp Bhd / Malaysia | TerraForm Global / Sunedison Solar Holdings 1 Pte Ltd (SE1), Sunedison Solar Holdings 2 Pte Ltd (SE2), Sunedison Solar Holdings 3 Pte Ltd (SE3) and TerraForm Global Operating (Malaysia) Sdn Bhd (TGOM) | Acquisition of 100% of stakes of 4 solar projects + O&M company | Nov, 2020 | 19 MW | Near Kuala Lumpur International Airport |
Solar Market Profile: the Philippines
Solar Power Policies & Targets
The Philippine Energy Plan (PEP) envisions a target of 20 GW of renewables by 2040 and a target of 15 GW or 35% RE share by 2030. Currently, around 1.2 GW of solar generation capacity has been installed.
The liberalized solar power market in the Philippines is governed by the 2008 Republic Act No. 9513 “An act promoting the development, utilization and commercialization of renewable energy resources and for other purposes”. It includes mechanisms such as the Renewable Portfolio Standard (setting a minimum percentage of generation coming from renewable sources), a FiT system with a fixed tariff for 20 years, creating a Renewable Energy Market (REM) regulation, the Green Energy Option (energy consumers can directly contract from renewable energy sources), net-metering for renewable energy, and fiscal incentives.
Solar Programs and Market
Past, current, and future solar programs announced:
a) 2013: Net-metering for installations up to 100 kW in which electricity is offset against electricity provided by the distribution utility.
b) 2012: FiT program with an initial capacity of 50 MW, later expanded to 500 MW at 9.68 PHP/kWh (equivalent to 0.20 USD/kWh) for 20 years with a 6% regression rate after year 1, and in 2016 the tariff was set to 8.69 PHP/kWh (equivalent to 0.18 USD/kWh). Around 4,016 MW of solar generation capacity has been awarded for on-grid projects.
c) 2017: The RPS on-grid rules took effect but will be imposed only from 2020 onwards.
d) 2020: Planned Green Energy Tariff Program auction in mid-2021 of 2 GW with details to be announced.
Solar market outside of government programs:
Other applicable business models in this liberalized electricity market include PPAs, with distribution utilities e.g., with Meralco or smaller electrical cooperatives under tender mechanisms. Due to the relatively high electricity tariffs (around 0.11 USD/kWh for businesses during daytime when solar power is generated), there is an interest for commercial and industrial as well as residential consumers in lowering their electricity bills. Corporate PPA models in the C&I segment are in some way in a legally grey area, but still being pursued, besides self-investment of such consumers.
Solar capacity forecast scenarios:
Solar M&A Activities and FDI
The majority of the local solar M&A market has recently been driven by large corporate acquisitions rather than project acquisitions, due to the slow movement in new utility-scale installations for years and the rather limited installed capacity available.
Foreign company and land ownership are limited to 40%, making the M&A scene slightly less attractive for foreign investors, although 100% foreign dividend and voting rights control can be achieved by applying (potentially contestable) corporate structuring methods.
Examples of recent M&A activities in the Philippines’ solar power landscape:
| Buyer / Country | Seller / Target Project | Transaction Details | Timing of Acquisition | Project(s) Capacity | Project Location(s) |
| Vivant Energy / the Philippines | Buskowitz Finance | Acquisition of 34.85% of stakes in the solar EPC company | Mar, 2021 | NA | NA |
| AC Energy (part of Ayala group) / the Philippines | Solar Philippines Power Project Holdings / Solar Philippines Central Luzon (SPCLC) | Acquisition of 97.6% of stakes to form joint venture for project developments | Feb, 2021 | NA | Central Luzon |
| GIC / Singapore | AC Energy (part of Ayala group) | Acquisition of 17.5% of stakes in AC Energy’s business | Jan, 2021 | NA | NA |
Solar Market Profile: Indonesia
Solar Power Policies & Targets
The National Energy Policy (KEN) targets a solar power generation target of 6.5 GW by 2025 and 45 GW by 2050. Currently, only around 307 MW of solar generation capacity has been installed, lagging behind its RE target and the country’s vast potential for solar energy.
Besides government programs such as auctions and FiTs, which constitute the main market in this government-controlled environment, bilateral agreements with the state-owned utility Perusahaan Listrik Negara (PLN) are possible under certain conditions (<10 MW and not in direct competition), while operational lease models (corporate PPA models are not legally possible) in the C&I market still lack significant traction.
Solar Programs and Market
Past, current, and future solar programs announced:
a) 2013: Auction by Directorate General of New & Renewable Energy and Energy Conservation (EBTKE) for 140 MW ground-mounted solar at 80 locations with sizes 1–6 MW under a 20-year fixed PPA with PLN. A ceiling tariff of 0.25 USD/kWh for imported modules and 0.30 USD/kWh for modules with local content >= 40% applied. 4 locations out of 11 failed due to tender conditions not met by participants. The program was later struck down by the Supreme Court due to inconsistencies with existing regulations.
b) 2016: A new framework on a pre-selection and first-come-first-served basis was introduced in 2016 with 250 MW in the first stage with tariffs ranging from 0.145–0.25 USD/kWh depending on location under a 20-year PPA with PLN. Local content was fixed at 25.63% for goods and 100% for services.
c) 2017: Pre-qualification was held by PT PLN (Persero) for the Sumatra region of 167.58 MW on a BOOT basis for a 20-year PPA with PLN and a price ceiling of 85% of local generation costs and heavy prescription of local content both in materials (40.68%) and services (100%).
d) 2017: In 2017 a 200 MW floating solar project was awarded bilaterally to Masdar, but subsequently challenged by competing bids required by applicable regulations. In 2020 the PPA was signed with PLN over 145 MW.
e) 2018: Release of a net-metering scheme for rooftop solar amended in 2019 that included reduction of capacity charge, exemption of emergency charge, exempting operation license for system <500 kW, limiting solar capacity to 100% of PLN customer capacity and setting the tariff for exported electricity at 65% of PLN’s applicable tariff (exported electricity would not be paid for but counted as credits towards purchased electricity).
f) 2020: Launch of pre-qualification of 90 MW floating solar in West Sumatra, 60 MW floating solar in West Java, and 100 MW solar plus battery storage in South Sumatra with additional projects in Borneo to be tendered. The projects would be under a design-build-finance operate (DBFO) model for 25 years with Indonesia Power holding a 51% stake. The pre-qualifications will be valid for 3 years.
Solar market outside of government programs:
Due to the artificially low, subsidized electricity tariffs (around 0.07 USD/kWh for industrial consumers during daytime when solar power is generated), it is still difficult for solar power to provide significant savings for corporate operational lease agreements in the C&I space and are therefore currently rather limited to off-takers with corporate sustainability targets. Due to the regulatory situation, corporate PPAs are not possible but operational lease models can be applied. Self-investments for captive consumption are slowly increasing with falling system costs.
Solar capacity forecast scenarios:
Solar M&A Activities and FDI
No major recent M&A activities due to the low installed capacity available and lack of ongoing utility-scale or larger rooftop solar plant developments.
100% foreign participation in projects of power generation, transmission and distribution of greater than 10 MW capacity are meanwhile possible. The foreign investment threshold for small-scale power generation (1–10 MW) remains at 49% and no foreign investment into projects <1 MW is permitted, complicating foreign investment in this industry segment.
Interested in selling or acquiring solar (or other RE) power assets or stakes in developers / IPPs in ASEAN? Please contact Moritz Sticher for further information on Apricum’s transaction advisory services.
