Mainstream to buy stake in 405MW of solar in Vietnam

Out-Law News | 01 Jul 2021 | 1:40 am | 1 min. read

Wind and solar company Mainstream Renewable Power has acquired an 80% stake in Vietnam’s Technology and Development Joint Stock Company (D&T), which has three solar projects with a combined 405 megawatts (MW) of generating capacity in Dak Nong province, central Vietnam.

The three projects are listed in the Vietnam government’s power development plan VII (PDPVII) which has been in development since 2019 and will be reaching financial close in 2022.

Mainstream has signed a deal with Vietnam’s government to share offshore wind development knowledge for the purposes of “capacity building”, according to a statement.

It signed an agreement in 2020 with Vietnam’s Advance Information Technologies Corporation (AIT) to develop a 500MW offshore wind plant in Ben Tre; and a deal with Phu Cuong Group to develop the 1.4 gigawatts (GW) Phu Cuong Soc Trang offshore wind plant in 2017.

Infrastructure expert John Yeap of Pinsent Masons, the law firm behind Out-Law, said: “Given the pivot away from coal, Vietnam will be increasingly reliant on large scale renewable energy generation, together with gas as a transition fuel, in order to meet its growing economy. As we have seen recently, increasingly larger onshore renewable projects are being financed and developed, largely with domestic debt and equity carrying the development risk.” 

“The offshore renewables sector will however require even larger quantum of capital per project, as well as involving greater development risk. It would therefore be a lot more dependent on international debt and equity during the development phase. In this regard, as with the challenges confronting investors in the past when the coal fired build-operate-transfer (BOT) power projects were designed and tendered, whilst the regulatory framework for offshore renewables is still evolving, we can anticipate a delivery model will eventually be developed to enable these large and complex projects to be financed, constructed and commissioned,” he said.

Vietnam released its PDPVIII in February. It aims to increase wind energy production from 600MW in 2020 to over 11GW – 12GW in 2030, and to grow solar power capacity to 19GW–20GW in 2030. 35 potential offshore wind projects are included in the plan. Total renewable energy generation from wind and solar sources will reach 39.8GW by 2030 and 121.7GW by 2045, according to the plan.