December 28, 2022
On December 20, 2022, the Japan International Cooperation Agency (JICA) signed a project finance loan agreement with BIM Wind Power Joint Stock Company to provide up to US$25 million for an onshore wind power project in Ninh Thuan Province, southern Vietnam, with a total capacity of 88 MW. The project is expected to help Vietnam reach its clean energy and climate action targets by offsetting approximately 215,000 tons of carbon dioxide annually.
The borrower of this loan will be a project company sponsored by BIM Energy Holding Corporation, a subsidiary of BIM Group Joint Stock Company, one of the largest Vietnamese private conglomerates, and ACEN Vietnam Investments Pte. Ltd., a subsidiary of ACEN CORPORATION (ACEN). ACEN is the listed energy platform of Ayala Corporation, one of the major conglomerates in the Philippines. The loan is co-financed by the Asian Development Bank (ADB) and other financial institutions (Hong Kong Mortgage Corporation Limited, Sumitomo Mitsui Banking Corporation, ING bank, and Cathay United Bank).
The Vietnamese government estimates the country's electricity demand to increase by 9.1% per year between 2020 and 2030, and especially strong electricity demand is expected in the coming years as a result of the country's economic recovery from COVID-19. Despite this growing demand, the government aims to reduce greenhouse gas emissions by 9% by 2030—compared to a base case scenario without climate change measures—and has adopted renewable energy as a specific measure. Therefore, to achieve an increase in both the electricity supply and climate resilience, the government has set a target in their power development plan for renewable sources to account for 15-20% of the power generation capacity in 2030—around 125-130 GW. In particular, 6,000 MW will be provided from wind power projects (approximately 5% of the country’s power generation capacity in 2030, according to the Revised National Power Development Plan VII), taking advantage of Vietnam's abundant wind power in its mountains and along its coastline.
In the renewable energy sector in Vietnam, there has been little precedent for private sector-led projects financed by local or foreign companies, and the lack of funds for introducing renewable energy has been an issue. In that sense, this project could be a model case for future private-led wind power projects in the country, together with JICA’s first wind power project using project financing in Vietnam, “Quang Tri Province onshore wind power project in Vietnam."
This project will contribute to SDGs (Sustainable Development Goals) Goals 7 (Affordable and clean energy), 13 (Climate action), and 17 (Partnerships for the goals). It will also contribute to the Initiative on Overseas Loan and Investment for ASEAN(*1), announced at the Japan-ASEAN Summit Meeting on November 4, 2019.
JICA has been supporting the introduction of renewable energy in Vietnam through such projects as "Quang Tri Province onshore wind power project in Vietnam," JICA's PSIF project; "B. Grimm Viet Nam Solar Project-Phu Yen Project," a sub-project of the "Leading Asia's Private Infrastructure Fund (LEAP)," funded by JICA and administered by ADB; and "Energy Efficiency and Renewable Energy Promoting Project," JICA's ODA loan project. JICA encourages further development of the country's renewable energy sector through this project.