PFAN Annual Report Reveals Surge in Climate and Clean Energy Investment
By Nancy Nguyen, Director of Consulting Operations, ACE Partners
The Private Financing Advisory Network (PFAN), one of our strategic partners, has recently unveiled its 2022 Progress Report, showcasing PFAN’s efforts and achievements in connecting climate and clean energy projects with financing opportunities in middle and low-income countries.
In Southeast Asia, there is a surging demand for decarbonization of the energy sector, particularly in Vietnam and Thailand where solar and wind power have a high penetration rate in the national energy mix. The decreasing levelized cost of energy from renewables is creating opportunities not only for renewable energy power producers but also for low-emissions generation equipment providers, electricity storage hardware and related services, including solar panel and wind turbine manufacturers, battery manufacturers, companies involved in extracting and refining minerals needed for batteries and solar panels (like lithium and nickel), and companies building and operating new generation networks [1].
PFAN's efforts have yielded significant results, including helping Thien Phu Energy secure a whopping USD 130 million investment to construct two wind farms totaling 60 MW in Ben Tre, Vietnam. This achievement marks one of the most substantial financial mobilizations in Asia for PFAN in recent years.
The adoption of e-mobility is on the rise across Southeast Asia, as evidenced by the 35% year-on-year growth in electric vehicle (EV) sales in the region during Q3 2022 [2]. Thailand is currently leading the charge in the EV market, capturing an early 60% market share, with Indonesia and Singapore following suit. In line with this trend, PFAN is extending its support to the e-mobility sector in Vietnam, with two of its assisted businesses – Selex Motors and QIQ Vietnam– successfully raising financing last year.
In addition to the burgeoning e-mobility sector, there is a burgeoning demand for alternative proteins in Southeast Asia. In 2022, PFAN has received multiple alternative protein project proposals from Cambodia, Vietnam, and Thailand, encompassing both animal feed and human consumption. The black soldier fly serves as a common source of protein in these projects.
Climate-smart agriculture remains an attractive investment opportunity and a key area for PFAN support. Precision agriculture and farmer service platforms are particularly appealing due to strong regulatory support, particularly in Malaysia, Thailand, and Vietnam [3]. For example, HUSK Ventures Cambodia was added to the PFAN pipeline in October 2022, with the aim of supporting farmers' livelihoods and climate resilience by transforming rice husks into cost-effective carbon-based fertilizers.
In 2022, PFAN supported eight projects in wind energy, rural electrification, energy access, clean transportation, and climate adaptation, raising close to USD 166 million in total investment. PFAN provided support to a total of 26 new projects in Indonesia (9), Philippines (5), Cambodia (4), Thailand (4), Myanmar (2), Laos (1), and Malaysia (1).
PFAN continued to strengthen its partnerships in 2022, including with the Sustainable Energy Association of Singapore (SEAS) to co-host the 4th edition of the Power ACE competition. PFAN provided business coaching and investment facilitation services to help start-ups scale up innovative technologies in clean energy and clean technology. PFAN advisors provided one month of mentorship to four out of the 12 shortlisted projects.
PFAN also supported the Malaysian regional bank CIMB to host the ESG-SME Pitch Challenge for SMEs in clean tech, clean energy, and sustainability across the Association of Southeast Asian Nations (ASEAN). PFAN identified and helped prepare the 12 shortlisted SMEs for the competition, which involved pitching their sustainability-focused projects to a panel of CIMB bankers and outside experts.
In addition, PFAN organized two investor roundtables, bringing together 20 investors from Southeast Asia and South Asia to share their experiences, lessons learned, and views on market direction and opportunities. More than 30 PFAN advisors and network partners joined each roundtable and actively engaged in the discussions.
PFAN also hosted two gender working sessions with Country Coordinators and Advisors, resulting in the identification of criteria to identify gender-responsive projects, gender-focused, and women-led businesses. These findings will be incorporated into the guidelines to support gender mainstreaming in PFAN projects.
’ Although 2022 was a challenging year as businesses and investors slowly emerged from the shadow of the pandemic, we saw a lot of promising and innovative companies in the region.” says Peter du Pont, PFAN Regional Coordinator for Southeast Asia and Co-Founder/Co-CEO, ACE Partners.