Strategic partnership signed for investment in renewable energy in Vietnam.
The Thanh Thanh Cong Investment Joint Stock Company (TTC), the holding company of the TTC Group, the Gia Lai Electricity Joint Stock Company (GEC), the International Financial Company (IFC), and the Singaporean Armstrong S.E. Clean Energy Fund (Armstrong) signed a strategic cooperation agreement in Ho Chi Minh City on June 30.
IFC - the World Bank's private investment arm - and Armstrong’s investment in the deal will secure them a 16 and 20 per cent equity stake in GEC, respectively. This aims to promote renewable energy in Vietnam by investments from foreigners to the local hydropower developer.
It is a first-time investment by IFC and Amstrong in Vietnam’s energy sector. As shareholders they will help the company expand its investment portfolio and invest in other renewable energy segments such as wind and solar power and the hydropower field.
GEC is one of the largest private sector hydropower players in Vietnam, with 84.4 MW of installed capacity across 15 run-of-the-river small-scale hydro power plants. “Support by IFC and Armstrong as shareholders will not only enable us to expand our core business in hydropower but also help us become a leading renewable energy company and provide sustainable alternatives to fossil fuel-based power generation in Vietnam,” said Mr. Le An Khang, CEO of GEC.
“Their investment is a vote of confidence in Vietnam’s hydropower sector potential and should help attract more international investors,” he added.
Vietnam’s electricity consumption has outpaced the country’s economic growth, doubling GDP growth over the past few years. GEC’s renewable energy developments will help the government reach its target of increasing power capacity by 14 per cent annually between 2015 and 2030.
“We believe GEC is well positioned to capture the strong growth potential in Vietnam’s renewable energy sector,” said Mr. Andrew Affleck, Managing Partner of Armstrong. “Armstrong’s aim is to share the knowledge and experience we have gained from developing and constructing multiple renewable projects in neighboring Southeast Asian markets to help GEC continue to build a leading position in Vietnam.”
By developing sustainable hydropower and other renewable energy sources, GEC will help the country meet its estimated 10 per cent annual increase in power demand, diversify its energy mix, and reduce its reliance on imported fossil fuels.
“We believe IFC’s investment is an important step that will encourage other investors to tap into the rich potential of Vietnam’s green energy sector, where participation by foreign investors is still modest,” said Mr. Hyun-Chan Cho, IFC Head for Infrastructure and Natural Resources for Asia Pacific. “IFC’s global industry knowledge will help transform GEC into a role model for other emerging renewable energy players in Vietnam by showcasing industry best practices while at the same time expanding supply of reliable and clean energy.”
Hydroelectricity is the world’s largest source of renewable energy and accounts for one-fifth of the world’s electricity supply from all sources. Over the last decade IFC has invested more than $1 billion in 75 hydropower projects in 25 countries around the world to promote hydropower’s responsible and sustainable development in developing countries.
- Thanh Thanh Cong
- International Financial Company
- renewable energy
- solar power