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ADB loan unlocks long-term financing for VN’s solar power

Jan 22. 2020
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By The Nation

The Asian Development Bank (ADB) signed a US$37.8-million loan deal with TTC Energy Development Investment Joint Stock Company on Wednesday (January 22) to develop and operate a 50-megawatt photovoltaic solar power plant in Vietnam’s Tay Ninh province.

ADB’s assistance for the Gulf Solar Power Project was provided through an innovative financing structure that ensures its bankability. It will help catalyse commercial financing for one of the first such large-scale transactions in the country involving solar power. 

The loan is divided into an $11.3-million A loan and a B loan of up to $18.9 million.

An additional $7.6 million was provided by the Leading Asia’s Private Infrastructure Fund, which is supported by the Japan International Cooperation Agency. 

The B loan will be funded by Bangkok Bank PCL, Siam Commercial Bank PCL and Standard Chartered Bank (Thai) PCL.

“ADB is excited about this transaction because the project will have a significant impact on the sustainability and security of Vietnam’s energy sector for years to come,” said Jackie B Surtani, director of the Infrastructure Finance Division in ADB’s Private Sector Operations Department. 

“Apart from providing much-needed financing to develop solar power in Vietnam, the project will help reduce perceived risks in the country’s renewable energy sector.”

Gulf Energy Development executive director Yupapin Wangviwat said the project fundamentals were “improved significantly as a result of its competitive financing structure and longer tenure led by ADB”.

The government plans to increase the share of renewable energy sources such as hydropower, solar, wind and biomass as a percentage of total installed capacity to 21 per cent by 2030 to meet rapidly growing energy needs and reduce greenhouse gas emissions by up to 25 per cent by 2030.

The project will develop and operate the 50MW solar plant and associated facilities in Tay Ninh northwest of Ho Chi Minh City. 

The plant will directly serve the residents and businesses of Ho Chi Minh City and surrounding areas and reduce annual carbon dioxide emissions by 29,760 tonnes by 2020.

TTC, established in 2017, is 90 per cent-owned by GED. GED is a private power generation company and has the largest portfolio of gas-fired power projects in Thailand.

Established in 1966, ADB is owned by 68 members, 49 from the region.

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