Vietnam bags first green loan for largest Southeast Asia solar plant, 257-megawatt solar plant located in Hoa Hoi, Phu Yen
Magic Circle law firm Clifford Chance has offered advice to Asian Development Bank (ADB) on Vietnam’s first ever green loan financing for its largest single operating solar plant.
Clifford Chance acted for ADB on the international aspects to the financing, valued at USD 186 million. The green loan is for the development of a 257-megawatt solar plant located in Hoa Hoi, Phu Yen, one of the largest solar plants in Southeast Asia and the biggest single operating solar plant in Vietnam.
The financing included a USD 27.9 million loan funded entirely by ADB, as well as a USD 148.8 million syndicated loan made available by a consortium of commercial banks with ADB acting as the lender of record. In addition, a USD 9.3 million loan has been made available from Leading Asia’s Private Infrastructure Fund (LEAP), which was launched in 2016 and focuses on infrastructure co-financing to increase access to finance for Asian infrastructure projects.
The solar plant will be developed by two companies, Truong Thanh Viet Nam Group JSC, and PetroVietnam Oil Phu Yen JSC, the latter a subsidiary company of one of Thailand’s largest private power suppliers, B.Grimm Power.
Once fully operational, the solar plant is expected to offset 123,000 tonnes of carbon dioxide per year, also providing electricity to Quang Ngai and Nha Trang and the surrounding areas of Vietnam’s South-Central Coast.
“This project will support the rapid development of solar power capacity in Viet Nam, advance the country’s low-carbon growth goals, and, we hope, catalyse further commercial bank financing for renewable energy,” emphasised ADB’s operations division infrastructure finance division director for East Asia, Southeast Asia, and the Pacific Jackie Surtani in a statement.
B.Grimm’s power president Preeyanart Soontornwata added that “this transaction will support the development of clean and sustainable energy in Viet Nam and help promote the green loan market in Southeast Asia”.
“This innovative transaction is reflective of robust investor interest in renewable power in Southeast Asia,” said Hans Menski, partner and co-leader of the Clifford Chance advisory team, in a separate statement. He added: “The team worked collaboratively with all stakeholders to structure a bankable financing that can serve as a benchmark for other large-scale renewables projects in Vietnam.” Clifford Chance’s head of renewables for the Asia Pacific, Philip Sealey, co-led a cross-border team of lawyers alongside Menski.