Renewable energy firms rush to issue bonds

Hanoi (VNS/VNA) — Renewable energy companies were becoming more active in the corporate bond market, according to brokerages.

Statistics from the Hanoi Stock Exchange (HNX), the national trade promotion office of Finland Finnpro and Techcombank Securities Co showed that among the 171 trillion VND (7.4 billion USD) of corporate bonds issued in the first half of this year, renewable energy companies accounted for 4 percent.

The average interest rate of energy bonds was 10.3 percent per year, only second after the real estate sector which stood at 10.6 percent per year.

The successful issuance rate in that period reached 92 percent, with an average term of 7.2 years.

Trungnam Group has mobilised up to 4.5 trillion from bonds so far this year, with an interest rate of 10.5 percent per year. Hong Phong 2 Energy JSC has also mobilised 1.6 trillion VND from 6-year bonds with an interest rate of 10 percent per year. Ea Sup 5 JSC collected 1.14 trillion VND with an interest rate of 11.3 percent per year and terms of 18 months to 9 years.

In August, My Son 1 Solar Power Co Ltd successfully issued 300 billion VND of three-year bonds with an interest rate of 10 percent per year.

Clean energy projects such as solar power and wind power are being promoted by the Government, with attractive electricity purchasing prices of 7.09 - 9.35 cents per kWh, tax exemptions for 4 years, and a reduction of 50 percent of tax payable for the next 9 years.

With the advantages of stable operations, low operating and maintenance costs, and high economic efficiency, bonds issued by clean energy companies have lower risks than other issuers in the fields of real estate and construction, while offering interest rates that are attractive to investors.

Clean energy bonds have a relatively long maturity, averaging 7.2 years, and most of them are issued privately, meaning they are sold to no more than 100 investors in the first year under current regulations.

However, from the second year onwards, these bonds can be traded by more than 100 investors, so there is no difference in buying or selling clean energy bonds compared to other bonds like real estate, which usually have a maturity of about 2-3 years.

Buyers of corporate bonds are often banks. Previously, banks focused on real estate bonds but clean energy is becoming increasingly more attractive./.