IFC provides funding for two wind power projects in Vietnam

Construction workers are at work at the site of Loi Hai 2 wind power project in Ninh Thuan Province – PHOTO: COURTESY OF IFC

The International Finance Corporation (IFC), a member of the World Bank Group, is funding the development and construction of two wind power projects in Central Vietnam, contributing to the development of renewable energy in the country.

IFC is providing a financing package of US$57 million to the Thuan Binh Wind Power JSC (TBW), a subsidiary of the Refrigeration Electrical Engineering Corporation (REE). This will enable the construction of two onshore wind power plants - Phu Lac 2 in Binh Thuan Province and Loi Hai 2 in Ninh Thuan Province - with a total capacity of 54.2 MW.

The plants will generate about 170 million kWh of clean energy per year once they start operating later in 2021.

With a large pipeline of wind and solar power projects, the financing package from IFC will help TBW channel Vietnam’s renewable energy potential.

The financing package from IFC includes finance mobilized by the multi-investor Managed Co-Lending Portfolio Program, managed by IFC's innovative syndications platform, which allows institutional partners to commit funds for a set of future IFC loans.

“We are confident that IFC's support will help us implement a strategic drive to make our power sector portfolio green in the coming years,” said Nguyen Ngoc Thai Binh, REE deputy chief executive officer.

Leveraging its global experience in wind projects, IFC will help ensure that these two projects follow the best industry as well as environmental, social and governance practices.

“The wind power sector in Vietnam is still in its nascent stage but has very large-scale potential. IFC's engagement will demonstrate viability to investors and help mobilize the much-needed funding to help realize Vietnam's cleaner, renewable energy potential," said Kyle Kelhofer, IFC's country manager for Vietnam, Cambodia and Laos.

Driven by robust economic growth, Vietnam foresees the need for a twofold expansion of its installed power capacity by 2030 to meet the increasing electricity demand. Renewable energy capacity including rooftop solar is projected to increase by approximately 19 GW to more than 36 GW over the coming decade, at an estimated cost of around US$20 billion, mostly expected to be developed and funded by the private sector.

In related news, the Asian Development Bank on May 27 signed a US$116 million green loan with the Lien Lap Wind Power JSC, the Phong Huy Wind Power JSC and the Phong Nguyen Wind Power JSC to build and operate three 48-MW wind farms, totaling 144 MW, in Quang Tri Province. The project will increase Vietnam’s wind power capacity by 30%, helping the country meet the rapidly growing demand for energy.

The loan forms part of a US$173 million green loan project financing package arranged and syndicated by ADB as the mandated lead arranger. 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.

Jackie B. Surtani, ADB private sector operations department’s infrastructure finance division director for East Asia, Southeast Asia and the Pacific, said this financing package underlines ADB’s commitment to helping Vietnam map out 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 added.