The Asian Development Bank (ADB) has signed a $116 million green loan with Lien Lap Wind Power Joint Stock Company (Lien Lap), Phong Huy Wind Power Joint Stock Company (Phong Huy), and Phong Nguyen Wind Power Joint Stock Company (Phong Nguyen) to build and operate three 48MW wind farms, totaling 144MW, in Quang Tri province.
In last February, the total investment of over $250 million in these projects was approved.
The project will generate an average of 422 gigawatt-hours of electricity and avoid an average of about 162 thousand tons of CO2 emissions annually. A gender action plan under the project will provide women from the local community with access to training on wind power operation and management.
Lien Lap, Phong Huy, and Phong Nguyen are owned by Power Construction Joint Stock Company No.1 (PCC1) and RENOVA, Inc.
PCC1 has nearly 60 years of experience in Vietnam’s power infrastructure sector, specializing in constructing power transmission networks and substations. It is among the largest hydropower developers domestically and is listed on the Ho Chi Minh Stock Exchange.
RENOVA is a Japanese renewable energy developer and operator of renewable energy power generation facilities including solar, wind, biomass, and geothermal power plants. Established in 2000, the company is listed on the first Section of the Tokyo Stock Exchange.
The loan forms part of a $173 million green loan project financing package arranged and syndicated by ADB as mandated lead arranger and bookrunner.
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.
The ADB loan comprises a $35 million A loan directly funded by ADB and an $81 million syndicated B loan.
“Lien Lap, Phong Huy, and Phong Nguyen will add to ADB’s extensive experience in large-scale renewable energy projects in Vietnam, and underlines our commitment to helping the country map a clean energy future,” said ADB private sector operations department infrastructure finance division director for East Asia, Southeast Asia, and the Pacific Jackie B. Surtani.
This is a milestone project which demonstrates how private financing can be effectively mobilized to develop wind power projects in Asia and the Pacific.
PCC1 Chairman of the board of directors and General director Trinh Van Tuan, said that this transaction is its first wind power project and the first time that they engaged with a group of international finance institutions and commercial banks.
ADB’s leadership in deal structuring, due diligence, and loan syndications is very crucial for the success of this transaction.
ADB mobilized long-term US dollar limited-recourse financing from commercial banks and other development finance institutions that was unavailable locally. This was done through a combination of B loans and parallel loans.
Parallel lenders include the Japan International Cooperation Agency and Export Finance Australia. B loan participants include Bank of China (Hong Kong) Limited, Bank of China Limited Macau Branch; Société Générale, Singapore Branch; and Triodos Groenfonds N.V.