Solar Philippines and Indonesian joint venture (JV) partner Medco Energi Inc. on Thursday signed a 20-year power purchase agreement (PPA) with Perusahaan Listrik Negara (PLN), Indonesia’s government-owned power utility, for two 25-megawatt (MW) solar farms in Bali.
The two farms will be located on the western and eastern parts of the renowned resort island. The West Bali project, in particular, would be the Southeast Asian neighbor’s largest solar-mounted project to date.
Solar Philippines, through subsidiary Solar Philippines Nueva Ecija Corporation (SPNEC), owns 49% of the joint venture, subject to regulations, which include securing PLN’s approval. The Solar Philippines-Medco JV beat several international power firms in the auction for both projects.
The Leandro Leviste-led firm first developed the Bali solar projects in 2017 before forming the JV with Medco in 2019.
“While this project is neither financially significant nor within our strategic focus of developing solar projects in Luzon, we hope this shows two things: First, that [Solar Philippines] is able to develop projects, form JVs, and win PPAs. If we can do this in Indonesia, then we should do so all the more in the Philippines, under the same model of winning projects with JVs,” Leviste said in a statement.
“Second, that SPNEC has opportunities even beyond what has been factored into the share swap valuation. While the project development business is full of challenges, we are working so that, in the end, we may exceed expectations,” he added.
Indonesia has one of the world’s lowest solar capacity per capita estimated at 300MW of solar capacity for a population of 276 million. Java, the country’s most populous island, has a scarcity of land for solar projects. The company said that it is encountering a similar challenge in Luzon, the Philippines’ largest and most populous island.
He cited geographical factors wherein large-scale lands which could be used for projects are far from high-demand areas.