ADB leads $186 million financing for the largest solar plant in Vietnam

This project is located in the southern province of Phu Yen's Hoa Hoi commune. It is the largest single operating solar power plant in Vietnam, as well as one of the largest in Southeast Asia. Once completed, it will save the country from emitting about 123,000 tons of carbon dioxide each year. It is reported that this power plant will deliver electricity to Quang Ngai, Nhu Tang cities and surrounding areas.

The financing includes a $27.9m loan funded by ADB, a $148.8m syndicated loan funded by commercial banks and a $9.3m loan from Leading Asia’s Private Infrastructure Fund (LEAP). The syndicated loan is the first green B loan in Asia Pacific to be certified by the Climate Bonds Initiative, also one of the largest this kind mobilised in Vietnam up to now, a news release of ADB said.

Phu Yen TTP Joint Stock Company (Phu Yen JSC) is the borrower, owned by B Grimm Power Public Company Limited and Truong Thanh Vietnam Group Joint Stock Company (TTVN).

Solar plants are booming in Vietnam in recent years. Nearly 90 solar power facilities commissioned last year according to Renewables Now. By end of last year, Vietnam surpassed Malaysia and Thailand to reach the largest installed capacity of solar panels in Southeast Asia, according to Vietnam Briefing. A report from Electricity of Vietnam (EVN), solar power alone reached 5.56 billion KWh by July 2020 – 3.65 times larger than the same period of 2019.

"It seems to be a continuing trend that development finance institution funding is still often required to 'fill in the gaps' regarding bankability issues with the present PPA model in Vietnam." said Priya Dalal, a projects expert at Pinsent Masons, the law firm behind Out-Law. "However, with an attractive feed-in-tariff and regulatory changes, developer interest in Vietnam renewable projects remains particularly strong in the region, particularly as the country seeks to move away from traditional coal-fired projects to meet its growing electricity needs."