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Company Voice: Argo Energy, South Korea

Argo Energy focuses on consolidating small-scale solar projects in South Korea. The company was founded in 2020 by energy veteran Jose Blasco who spotted a unique opportunity in a fragmented market. Actis invested in Argo Energy in early 2024. Actis draws on its experience of renewables in other markets and its deep knowledge and network in South Korea. It plans to drive growth, navigating the complex landscape of a country where stakeholder relationships are paramount.

Can you explain the growth opportunities for small-scale solar projects in South Korea?

For many years in South Korea there has been a policy that utilities must procure a certain percentage of their electricity from renewable resources. Many corporates in South Korea are seeking to decarbonise their energy. One way to achieve that is to simply buy renewable energy certificates (RECs). But we think corporates are looking to do more. There is a lot of demand for corporate Power Purchase Agreements (PPAs), but the supply is limited.
One reason supply is held back is that the local terrain is challenging. The landscape is densely forested in parts, quite mountainous and people don’t like large projects near their land. As a result, the growth of renewables in South Korea has not kept up with demand. The advantage of small-scale projects is that they can seek approval relatively quickly, compared to larger ones. Typically, there is limited opposition to small, one megawatt solar proposals.

Are there constraints in this market that the One Actis approach will help overcome?

One challenge lies in the disproportionate effort required for different size of projects. To scale efficiently, we have to be exceptionally lean in our processes and standardise operations. This is a strength of the Actis approach. Actis has experience of how to operate projects efficiently.

The One Actis approach, being able to draw on the real estate team’s expertise, enhances our presence in South Korea. In a market where relationships and networks are critical, Actis has a reputation and experience that carry significant weight. We’re optimistic about exploring further collaborations, especially in financing, project origination and partnerships with key players in South Korea.

How do you see Actis' involvement contributing to Argo Energy's future success?

Our focus in the next 12 months is to establish robust systems and teams that enable sustainable growth. We are keen to leverage Actis’ experience globally in running similar businesses and adopt best practice tailored for the local market.

Actis also has a well-established presence in the South Korean market and that promises to offer us a secure footing and help us build credibility, which would take much longer without that support. Being able to lean on various parts of the Actis family has provided us with a profile and opened doors for partnerships. While there is some scepticism about international companies, Actis’ ownership lends us credibility and aids our efforts in forming strong collaborations in South Korea.

What was the appeal of Argo Energy to Actis?

Argo Energy’s focus on small-scale solar aligns with South Korean market needs. This approach allows for quick and efficient project approval. They also have a strong team, committed to sustainability and a clear emphasis on process, which resonated with the Actis values. With more capital and strategic growth, we saw the potential to scale up the Argo Energy business responsibly, ensuring efficiency without compromising on risk controls or quality.

How did the One Actis model help you assess the opportunity and shape how you view the business going forward?

The Actis real estate team in Seoul, led by Actis partner Scott Choi, has proved invaluable. Their experience with greenfield development, dealing with utilities and obtaining permits has facilitated the due diligence process. Argo Energy has done exceptionally well since launch but is now at a point where it needs to grow efficiently and access different parts of the market. Our existing relationships and access to funding will contribute to Argo Energy’s growth.

Securing, building and operating the right projects efficiently and sustainably is always a challenge. With our experience in building and operating companies across different sectors, Actis is well-positioned to address these challenges. Our goal is to streamline processes, put the right systems in place and leverage our international knowledge to ensure Argo Energy’s successful growth.