Singapore-based renewables firm Sunseap International has signed an agreement with InfraCo Asia Development to jointly develop a 168MW solar project in Vietnam, with negotiations for a PPA ongoing.
Allard Nooy, CEO of InfraCo Asia, told PV Tech that this is the first utility-scale solar project in Vietnam to receive prime minister approval. The JV is currently in negotiations to get a bankable PPA in place and Nooy expects the lenders for this project to be a combination of local banks as well as PFIs.
Vietnam’s solar PPA parameters have come under intense scrutiny from international financiers and lawyers, but this new project marks one of the first occassions where developers have showed major progress on a large-scale project, despite the risks involved. Construction has started on several more modestly-sized projects in Vietnam recently.
Nooy said InfraCo Asia has the benefit of already having a PPA in place with the Vietnamese utility EVN for a hydroelectric project, as well as having relationships with local banks through that project. Nooy previously noted that EVN has never defaulted on a PPA with foreign invested IPPs.
The new project in Ninh Thuan province, on the south-central coast of Vietnam, will be one of the first large-scale solar projects in Vietnam and is expected to power the equivalent of up to 200,000 households. It is expected to reach commercial operation by June 2019.
InfraCo Asia, an infrastructure development and investment company of the Private Infrastructure Development Group, will provide funding for the development phase of the project.
Menawhile, Sunseap International, the global arm Sunseap Group, will continue to hold a majority stake in the project, while InfraCo Asia will take a minority stake alongside Sunseap’s existing partner, CMX RE Canada.
The construction phase will create more than 200 jobs for local workers, while operations will create 30 long-term jobs.
Lawrence Wu, co-founder and director of Sunseap, said: “We are delighted to have received the support of InfraCo Asia for our first project in Vietnam. We see huge potential for solar energy development in Vietnam and are excited to bring affordable and reliable clean energy to the country.
In a release, Nooy added: “As the opportunity for renewables in Vietnam continues to grow, we are excited to partner with Sunseap on a project that will serve as a catalyst for further private sector investment. Projects like Ninh Thuan solar create a ‘demonstration effect’ that serves as a beacon for future development.”
InfraCo Asia has also signed for a combined 30MW wind and 50MW solar project at Phuoc Minh Commune, Thuan Nam District, Ninh Thuan Province in Vietnam. InfraCo Asia, through its Southeast Asia developer team, Infunde Development and local partner TSV Joint Stock Company (TSV), will invest US$4.8 million into project development.
According to a joint release, solar power is expected to become the main new renewable energy source in the future, with installed capacity to be increased from around 6-7MW at end of 2017 to 850MW by 2020, accounting for 1.6% of the country’s power generation and 12GW by 2030 or 3.3% of generation.