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ADB extends first financing to Vietnam’s wind power project with green loan
Project demonstrates mobilization of private financing for wind power projects in the region
28 May 2021 | Chito Santiago

The Asian Development Bank (ADB) on May 27 announced the signing of a US$116 million green loan with three Vietnamese wind power companies, demonstrating its commitment to help the country forge a future for clean energy.

The three companies – Lien Lap Wind Power Joint Stock Company, Phong Huy Wind Power Joint Stock Company and Phong Nguyen Wind Power Joint Stock Company – will build and operate three 48-megawatt (MW) wind farms, for a total of 144MW, in Quang Tri province. The three companies are owned by Power Construction Joint Stock Company No 1 (PCC1) and RENOVA, and the projects will increase Vietnam’s wind power capacity by 30%, bolstering the country’s drive to boost its energy supply.

The loan forms part of a US$173 million green loan project financing package arranged and syndicated by ADB as mandated lead arranger and bookrunner. It is ADB’s first financing of a wind power project in Vietnam, and is certified by the Climate Bonds Initiative, which administers the international Climate Bond Standard and Certification Scheme. The ADB loan comprises a US$35 million A loan directly funded by ADB and an US$81 million syndicated B loan.

Commenting on the project, ADB private sector operations department infrastructure finance division director for East Asia, Southeast Asia and the Pacific Jackie Surtani says the three companies will add to ADB’s extensive experience in large-scale renewable energy projects in Vietnam, and underlines the bank’s commitment to helping the country map a clean energy future. “This is a milestone project which demonstrates how private financing can be effectively mobilized to develop wind power projects in Asia and the Pacific,” he points out.

“This transaction is our first wind power project and the first time that we engaged with a group of international finance institutions and commercial banks,” adds PCC1 board chairman and general-director Trinh Van Tuan.

RENOVA founding CEO Yosuke Kiminami says the Vietnam wind power project is the company’s first overseas renewable energy project. “We very much appreciate ADB’s participation and tremendous support to ensure that the project meets international environmental and social standards.”

In executing the deal, ADB mobilized long-term US dollar limited-recourse financing from commercial banks and other development finance institutions that was unavailable locally. This was done through a combination of B loans and parallel loans. Parallel lenders include the Japan International Cooperation Agency and Export Finance Australia. The participants in B loan include Bank of China (Hong Kong); Bank of China (Macau); Société Générale (Singapore) and Triodos Groenfonds NV

The project will generate an average of 422 gigawatt-hours of electricity and avoid an average of 162,430 tonnes of CO2 emissions annually. A gender action plan under the project will provide women from the local community with access to training on wind power operation and management.

PCC1 has nearly 60 years of experience in Vietnam’s power infrastructure sector, specializing in constructing power transmission networks and sub-stations. It is among the largest hydropower developers domestically and is listed on the Ho Chi Minh Stock Exchange. RENOVA is a Japanese renewable energy developer and operator of renewable energy power generation facilities including solar, wind, biomass and geothermal power plants. Established in 2000, the company is listed on the first section of the Tokyo Stock Exchange.

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