Philippe Le Houérou, CEO of IFC, a member of the World Bank Group, has arrived in Vietnam for an official visit today. Le Houérou will meet senior government officials and business representatives and visit projects supported by IFC.
One of Le Houérou’s stops in the country will be a visit to the first private grid-connected solar farm, the TTC Phong Dien solar power plant, developed by Gia Lai Electricity JSC (GEC) in conjunction with IFC.
The 35MW solar plant generates about 60 million kilowatt hours, enough to power about 35,000 homes a year. It was built in just eight months and under budget—and it came at a significant time for Vietnam.
The country, which has long relied heavily on coal and hydropower, faces a rising demand for energy. Demand in the electricity sector has grown at 13 per cent a year since 2000 and is projected to continue to grow at 8 per cent through 2030.
Renewable energy can contribute to meeting this need and IFC’s equity investment in the Phong Dien solar plant aimed to help spur renewable energy production across the country.
IFC invested in GEC, a subsidiary of Thanh Thanh Cong Group (TTC Group) in 2016. GEC then owned and operated a portfolio of 15 run-of-river small-scale hydropower plants and hoped to expand its portfolio.
Armstrong S.E. Clean Energy Fund Pte. Ltd., a private equity fund managed by Armstrong Asset Management, and an existing IFC client, co-invested alongside IFC for about an 18 per cent stake in GEC.
To further support renewable energy projects in Vietnam, IFC invested $75 million in an infrastructure-focused listed green bond, issued by Philippine power company AC Energy. Its goal is to develop up to 5GW of renewables across the East Asia and Pacific region by 2025.
IFC supports AC Energy wind and solar projects in Vietnam that total up to 360MW. IFC’s investment anchored the $300 million green bond, helping to mobilize international and institutional financing for use for AC Energy’s regional projects.
“Vietnam’s development achievements and its economic rise have been remarkable,” Le Houérou said. “The country is now one of the fastest growing economies in the world, with a strong manufacturing base and a young, dynamic workforce. The economy continues to show fundamental strength.”
“We are committed to continuing our work to mobilise finance and unlock private sector solutions to help Vietnam achieve its aspirations of becoming a modern dynamic middle-income country,” Le Houérou said.
IFC began engaging with Vietnam in 1992, responding to the country’s quest for foreign investment and expertise to help the transition to a successful market-oriented economy.
Apart from supporting renewable energy, IFC has also played a key role in other sectors. These include the first private port project, the first build-operate-transfer power project, the first private leasing company, the first equity fund supporting small and medium enterprises, and the first internationally accredited university.