Dragon Capital clean energy PIPE in Laos

Dragon Capital's investment, its first from its Mekong Brahmaputra Clean Development Fund, follows an investment into the company by Leopard Capital, which came just ahead of EdL Gen's debut on the Laos Exchange. The bourse opened on January 11th with just two securities trading - EdL Gen and the state-backed Banque Pour Le Commerce Exterieur Lao - and while the exchange has limited liquidity, at the end of its first week of trading, EdL Gen was up 30% at LAK5600 ($0.69).

Gavin Smith, Dragon Capital's Director of Clean Development, told AVCJ that EdL Gen is an appealing target because of Laos' green energy aspirations. The investment came from its $45 million Mekong Brahmaputra Clean Development Fund, which launched in July as the first fund focused cleantech targets in the region. Smith said EdL Gen has ambitions to double its hydropower generation capacity within the next five years.

"Laos is unique as it's the only substantial net exporter of power in the region," Smith added. "And its potential and existing customers are Thailand, Vietnam, Cambodia - which is in need of power - and even China."

Mekong Brahmaputra Clean Development Fund's $3.36 million bought the fund a 0.72% stake.

Laos and other Mekong markets have slowly made inroads in their green energy capabilities. Vietnam, in particular, has moved from oil and coal to adopting sources like wind power. The country is now developing a 99-megawatt wind farm, and according to the World Bank, Vietnam may be able to produce as much as 10 times the its anticipated demand by 2020 from wind farms. Late last year, Laos' prime minister proposed a program in conjunction with the Vietnamese government to share their energy and conservation experiences to bolster their industries.

But while the future looks positive in terms of green energy, finding those opportunities now is a more difficult endeavor. Smith noted that in Dragon Capital's own clean development fund, diversification is key. The fund specifically focuses on not only renewable energy investments, but energy efficiency and conservation, as well, giving his team a wider scope to seek out investment targets. He added that, while the fund currently has $45 million to invest, the vehicle's actual corpus is $100 million - the full sum of which Smith hopes can be put to work.

 

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• Topics
• Southeast Asia
• PIPEs
• Infrastructure
• Cleantech
• Dragon Capital Group