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Acuris: Vietnam sees spike in power deal activity

Released at: 12:14, 26/07/2019

Acuris: Vietnam sees spike in power deal activity

Photo: Viet Tuan (inllustration)

Acuris company Inframation releases latest Asia league table.

by Doanh Doanh

According to the latest Asia league table released by Inframation, an Acuris company, Asia wrapped up $32.85 billion in greenfield power deals in the first half of this year, second only to Europe. India’s governmental push suggests more opportunities lie ahead, while investors await Japan’s new wind promotion zones.

The value of power deals reaching financial close in Asia chalked up its best six-monthly performance in five years. Greenfield deals were in the lead in the six months to June, surging 44 per cent to $32.85 billion. Energy made up 21 per cent of the total, compared with 1 per cent a year ago. Power accounted for 29 per cent, while transport followed with 24 per cent.

Vietnam saw a spike in deal activity as developers raced to reach financial close and commission their projects before a favorable tariff regime expired on June 30. While balance sheet financing is still the way to go for many, experienced players such as InfraCo Asia and Sunseap managed to secure initial limited recourse loans for their 168MW Ninh Thuan facility from international lenders.

JBIC in April led a team of banks including SMBC, MUFG and Mizuho to provide up to $1.99 billion for the Van Phong 1 coal-fired power plant in Vietnam, with part of the loan covered by Nippon Export and Investment Insurance. In March, Tohoku Electric Power agreed to buy 10 per cent of the Nghi Son 2 1,200MW coal-fired project - one of the largest in ASEAN.

While leading international companies made inroads into emerging markets, many Western institutional investors are still opting for OECD countries for more steady returns, according to a banking source.

Following its first investment last year, BlackRock Real Assets in May enhanced its Taiwan solar portfolio through an acquisition of a 115MW portfolio mainly made up of under-construction or shovel-ready power stations.

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