Solar firm Sunseap scores $50m funding from Goldman Sachs

The milestone agreement is a sign of confidence in the city-state's growing solar industry, and will enable Singapore's largest solar leasing firm to significantly scale up projects across the country

Singapore’s largest solar leasing company Sunseap Leasing announced on Friday that it has obtained $50 million in funding from investment banking firm Goldman Sachs, which will allow it to significantly expand its solar projects in the city-state.

The firm said it expects to grow its energy generation capacity by at least 30MW (megawatts) – roughly the size of 30 solar panel-covered football fields, which can power about 8,300 four-room Housing Board (HDB) flats -  and create a funding platform for even further growth.  

This partnership is a major coup for the homegrown firm set up in 2011. Its co-founder and director, Lawrence Wu, told Eco-Business this was the first time Singapore’s solar industry has attracted significant international capital.

“The entry of financiers like Goldman to fund Sunseap Leasing is an important milestone for the renewable energy scene in Singapore. The funding will all go towards Sunseap’s solar leasing projects to be implemented at zero upfront cost for the client, which signifies grid parity,” he said.

The partnership “demonstrates the long term viability of distributed solar generation, which is groundbreaking for the Company”, he added.

The partnership with Goldman will enable Sunseap to scale up solar projects in Singapore at a faster pace. More businesses, residential owners, schools and municipalities can access clean power at a lower price than current utility rates, without the risks of upfront installation, maintenance and repair costs, noted Sunseap.

The firm designs and installs customized solar energy systems for clients, who only pay an initial deposit and monthly lease fee based their energy usage, while Sunseap bears the installation, maintenance and repair costs for their systems.   

The entry of financiers like Goldman to fund Sunseap Leasing is an important milestone for the renewable energy scene in Singapore. The funding will all go towards Sunseap’s solar leasing projects to be implemented at zero upfront cost for the client, which signifies grid parity.

Lawrence Wu, co-founder and director, Sunseap Leasing

Clients can opt to pay a fixed tariff for a typical contract duration of 20 years, or pay variable rates, based on a fixed discount to prevailing electricity prices. At the end of the contract duration, clients can choose to renew or terminate their contracts or purchase the whole system from Sunseap.

Sunseap Leasing said it has installed projects of a generation capacity of almost 17MW for clients including  HDB and town councils, Singapore American School, Raffles Institution, Cambridge Industrial Trust and Jurong Health Services.

Existing Sunseap clients such as Pratt and Whitney (Singapore Component Repair), Eagle Services Asia and the Singapore American School also won the 2013 Solar Pioneer Awards, presented by the Singapore Economic Development Board during the Singapore International Energy Week. 

Alex Turnbull, Executive Director at Goldman Sachs, said: “We are very positive about the opportunity in distributed solar, and more so in Asia where clean and lower cost energy is needed the most. Sunseap’s offering has the potential to lower energy costs, create jobs and reduce carbon emissions all at the same time.”

The firm previously said it plans to invest US$40 billion by 2021 into renewable energy projects – an area it has described as “transformational”.

The agreement between Sunseap and Goldman Sachs further strengthens Singapore’s status as a clean energy hub for the Asia Pacific Region, and the largest market for solar energy in the region.

“Companies can leverage Singapore’s strengths in technology, ability to attract international talent, as well as sophisticated financial market to grow their regional business and develop novel business models such as solar leasing”, said Goh Chee Kiong, executive director of cleantech at the Singapore Economic Development Board in a statement.

Reflecting on the wider impact of this agreement, Mr Goh added, “We are pleased that Sunseap’s partnership with Goldman Sachs will increase the vibrancy of the clean energy industry ecosystem and also catalyse new business models to accelerate solar adoption in Singapore.” 

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