World Bank Funding Helps Boost Vietnam Renewable Energy

Vietnam’s renewable energy sector is expected to get a boost thanks to financial support from international organizations, especially the World Bank which through International Finance Corporation (IFC) has increased its loans to help the country taps potentials. The latest support came when IFC and Singapore-based renewable energy private equity fund Armstrong S.E. Clean Energy Fund acquired respective 16% and 20% stakes at Gia Lai Electricity Joint Stock Company (GEC). This is the first time both investors are channeling funds into Vietnam’s renewable power sector, a move which could boost foreign investor confidence in the country’s hydropower and renewable energy potential. GEC chief executive Le An Khang welcomed the support by IFC and Armstrong, saying it would enable the company to expand its core business in hydropower, and also help cement GEC’s position as Vietnam’s leading renewable energy company. GEC is one of the largest private sector hydropower players in Vietnam. Currently, the company produces 84.4 MW of installed power capacity from 15 run-off-the-river small-scale hydro power plants situated in the Central Highlands province of Vietnam. As new shareholders, IFC and Armstrong will help GEC expand its hydropower business as well as explore potentials in solar and wind. “We believe GEC is well positioned to capture the strong growth potential in Vietnam’s renewable energy sector,” said Armstrong’s managing partner Andrew Affleck. With IFC and Armstrong’s investment into GEC, the company is hoping to help the government meet its target of a 14% annual increase in installed power capacity between 2015 and 2030, diversify its energy mix and reduce its dependence on imported fossil fuels, he said. IFC’s Hyun Chan Ho, who is the Asia Pacific head for infrastructure and natural resources, said foreign investment into Vietnam’s renewable energy sector is still modest. He hopes that IFC’s move will boost foreign investor confidence in the country’s abundant and untapped renewable energy potential. (www.eco-business.com Aug 3)