ADB, BGRIM reaffirm long-term partnership with green loan for Vietnam's largest solar venture

The syndicated financing for the 257-megawatt (MW) solar power scheme in Vietnam's Phu Yen province represents the first green loan in Asia and the Pacific to be certified by the Climate Bonds Initiative, part of an independent global environmental movement.
The financing has in particular further cemented the long-term partnership between BGRIM and ADB which is one of the major financiers of the Phu Yen scheme.
ADB has extended $27.9 million to Phu Yen TTP Joint Stock Co, the sponsor of the solar power project in which BGRIM has an 80 per cent stake and Truong Thanh Viet Nam Group Joint Stock Company (TTVN), which holds a 20 per cent interest.
The group of commercial banks, which agreed to provide a total of $148.8 million to the project includes Bangkok Bank, Kasikornbank, Kiatnakin Bank, Industrial and Commercial Bank of China from China and Standard Chartered Bank.
The other lender is the Leading Asia’s Private Infrastructure Fund, which contributed $9.3 million.
BGRIM chairman Harald Link said the loan accord marks another successful milestone of the company.
The Phu Yet solar farm has already started supplying electricity to the Electricity of Vietnam under a 20-year contract at a feed-in-tariff of 9.35 US cents per kilowatt-hour.
That means the project has begun to generate revenue to BGRIM and its Vietnamese partner.
The Phu Yen project serves as a catalyst to promote the use of renewable energy in the socialist republic as well as drive the country's economic growth, said Link.
Preeyanart Soontornwata, chief executive officer of BGRIM, said the green loan showed the company has once again pioneered a new form of financial innovation that focuses on the development of clean energy.
BGRIM had earlier launched Thailand's first green bond issue in association with ADB.
Jackie B Surtani, infrastructure finance division director for East Asia, Southeast Asia, and the Pacific at ADB's private sector operations department, said: “ADB is committed to supporting BGRIM, one of our most valued clients, with its long-term expansion into Vietnam and its important work in renewable energy. We’re also excited to work for the first time with TTVN.
This project will support the rapid development of solar power capacity in Vietnam, advance the country’s low-carbon growth goals, and, we hope, catalyse further commercial bank financing for renewable energy.”
The Phu Yen solar energy project is the largest in Vietnam and one of the largest power plants in Southeast Asia.
The facility will save 123,000 tonnes of carbon dioxide per year and the power plant will support the electricity needs of Quang Ngai and Nha Trang as well as the surrounding areas in the region, one of Vietnam's major tourism hubs.