Illustrative image (Source: VNA)
 
Hanoi (VNS/VNA) - Commercial banks are rushing to provide loans for green energy projects amid a wave of investment in the growing industry, dubbed a landmark for the country’s renewable energy outlook.

Vietcombank has recently approved a 785 billion VND (33.55 million USD) loan for the BP Solar 1 project, which has total investment capital of 1.2 trillion VND with designed output of 46MW in the south central coast province of Ninh Thuan.

The bank last month also signed a contract with the Dai Hai Power Investment and Development SJC to fund its 1 trillion VND Srepok Solar 1, which has a designed output of 50MW.

Another bank – HDBank – has so far also planned to set aside up to 7 trillion VND for the construction of green energy projects from now to 2020.

Under HDBank’s plans, it will lend to projects which were approved by the Government and reach their commercial operation date before June 30, 2019.

To qualify for the bank’s loans, borrowers must have a minimum equity of 150 billion VND and the equity ratio in their projects must be at least 30 percent of the projects’ total investment capital. The bank also requires that all proceeds from the projects be transferred to the customers’ accounts at HDBank.

VietinBank has recently financed 1 trillion VND for the 68.8 MW TTC 01 solar project in the southern province of Tay Ninh. The project has total investment of 1.6 trillion VND.

Early this year, two banks – Agribank and Vietnam Development Bank – signed a contract to co-fund the Phong Dien solar power project in the central province of Thua Thien-Hue.

The Phong Dien project, which has a designed output of 35 MW and total investment cost of 838 billion VND, was recently inaugurated after just nine months of construction, becoming the first solar power plant to be put in to operation in the country.

The wave of investment in the renewable energy industry was spurred by the Government’s incentives and the country’s strong potential for solar and wind energy generation. Investors are also racing against time so their projects enjoy the Government’s preferential feed-in tariff (FiT).

According to the Government, only solar energy projects which reach commercial operation dates (COD) before June 30, 2019 qualify to enjoy the FiT of 9.35 US cents per kWh. The deadline for onshore and offshore wind power projects to get the FiT of 1,928 VND (8.5 US cents) and 2,223 VND (9.8 US cents) per kWh, respectively, is November 1, 2021.  

With such prices, if they meet the deadline, renewable power projects will make significant profits as the power retail price currently averages at only 1,720.65 VND per kWh (7.54 US cents).

The financial and business information corporation Stoxplus said that foreign and local investors are excited about renewable energy in Vietnam, which is expected to grow at 23.2 percent annually during 2020-2030.

There are some 245 renewable energy projects in Vietnam, including wind and solar power as well as biomass electricity, which are being deployed at different stages. If all these projects begin operation, the total capacity of the country’s renewable energy should reach 23.2GW, which is nearly 10 times higher than the target of 2.65GW by 2020 as indicated in the country’s Revised National Master Power Plan VII.-VNS/VNA