Chubu Electric Power Co is investing into Vietnamese firm Bitexco Power with a 20% stake by purchasing undisclosed stakes from Japan’s Orix Corp and Singapore’s United Overseas Bank and buying new shares to be issued by the Vietnamese company.

This will be the Japanese utility’s first investment in Vietnam and in an overseas hydroelectric firm. The investment value is not disclosed and the deal is awaiting regulatory approval.

Bitexco Power Co (BPC) is an arm of Ho Chi Minh City-based Bitexco Group, which operates real estate, energy, commercial services, infrastructure, telecommunications, and oil and gas exploration businesses in Vietnam. The private group owns and operates 21 hydropower plants and one solar power facility across the country, with a total generation capacity of more than 1,000 megawatts. The operational solar power facility is in the central province of Ninh Thuan, Vietnam’s driest and sunniest area.

“We will work to maximize the company value of BPC by utilizing the technology and expertise related to hydropower maintenance that we have accumulated over 70 years in Japan,” Chubu Electric says in an announcement from Japan. “With the anticipated continuing expansion of renewable energy in Vietnam, by becoming a vital partner of BPC we will contribute to the realization of a carbon-neutral society.”

Vietnam, where the population is approaching 100 million, will continue to experience remarkable population expansion and economic growth, the Japanese firm adds.

In September 2016, Japanese financial services group Orix Corp and UOB Venture Management of United Overseas Bank said in a joint announcement they invested US$25 million each in Bitexco Power. The two firms also wanted to tap the Vietnamese energy market.

LNG and power project

Vietnam is increasingly relying on renewable energy to fuel its fast-clipped economy.  On October 7, three Korean companies – Hanwha Energy, Korea Gas Corp. (Kogas), Korea Southern Power (Kospo) – and Vietnamese private conglomerate T&T Group received approval to develop a major liquefied natural gas and power complex in Quang Tri Province, which is envisioned to become the energy hub in the country’s central region by 2030.

The four partners will invest about US$2.3 billion in the project’s first phase of 1,500MW. The project is expected to start commercial operations by 2026 or 2027. The three Korean companies will be responsible for 60% of the investment capital, while Hanoi-based T&T Group will contribute 40%.

The joint project will cover 120 hectares in Hai Lang District, including a terminal for LNG imports and power plants. According to the Korean consortium’s own plans, Hanwha Energy will supervise the overall business development and supply of LNG, Kogas be responsible for constructing and operating the LNG terminal, and providing technical support, while Kospo will provide its expertise and know-how in the construction and operation of LNG power plants.

Hanwha Energy is an affiliate of Hanwha Group, one of Korea’s 10 largest conglomerates. As for T&T Group, the conglomerate is focusing on energy as one of its key business areas.

In September Hanwha and US wind and solar farm developer UPC Renewables signed a memorandum of understanding to jointly develop onshore and nearshore wind farms and solar power projects in Vietnam, with total investments estimated at US$2.5 billion. The partnership envisages a combined capacity of nearly 1,500MW from projects in Ninh Thuan and Dak Nong provinces in the central region, and Soc Trang, Ben Tre and Bac Lieu in the south.

Right before its partnership with UPC, T&T signed another MoU with Denmark’s renewable energy giant Ørsted to team up on wind energy projects over a period of 20 years. The alliance plans to develop almost 10 gigawatts of offshore wind projects off the coasts of Ninh Thuan province and adjoining Binh Thuan. The projects will involve investments of up to US$30 billion.

Vietnam’s need for renewable energy and LNG power plants is continuing to rise amid the environmental and economic constraints of manufacturing and business facilities that rely on hydropower and coal energy.