On December 20, the Japan International Cooperation Agency (JICA) signed a project finance loan agreement for up to US$25 million for an onshore wind power generation project with a total capacity of 88 MW in Ninh Thuan Province in southern Vietnam. The project is expected to contribute to the reduction of CO2 emissions by approximately 215,000 tons per year. The borrower for this project is the Project Company, which is owned by BIM Energy Holding Corporation, a Vietnamese company, and ACEN Vietnam Investment Pte Ltd. The project will be co-financed by the Asian Development Bank (ADB), Sumitomo Mitsui Banking Corporation, and others.
The Vietnamese government projects that electricity demand will increase by 9.1% per year between 2020 and 2030, and is expected to remain strong as economic growth recovers from the downturn caused by the new coronavirus infection. In addition, the government has set a target of reducing greenhouse gas emissions by 9% by 2030 compared to the level in the absence of climate change measures, and is promoting the introduction of renewable energy through concrete measures to achieve this goal. The government’s power supply development plan sets a target of using renewable energy sources for approximately 15-20% of the 125-130 GW of power generation capacity in 2030, in order to both increase the supply of electricity and combat climate change. Of this amount, 6,000 MW, or about 5% of the 2030 capacity, will be provided by wind power generation by 2030, taking advantage of the abundant wind power in the mountains and coastlines of Japan.
In the renewable energy field in Vietnam, there have been few precedents of private sector-led projects financed by local or foreign companies, and the lack of funds for the introduction of renewable energy has been an issue. This project, in which Vietnamese and Filipino companies will serve as the project sponsors and mobilize funds from foreign private financial institutions, follows the “Quang Tri Province Onshore Wind Power Generation Project” signed in May 2021. The project is expected to be effective in spurring the formation of similar projects. This project will contribute to SDG Goal 7 (Make energy clean for all), Goal 13 (Take concrete measures against climate change), and Goal 17 (Achieve the goals through partnership) by increasing the country’s electricity supply from renewable energy through the construction and operation of wind power plants and related facilities. Goal 17 (Achieve the Goals through Partnerships). It will also promote green investment by businesses in the ASEAN region, contributing to the Initiative for Overseas Investment and Loans to ASEAN (*1) announced by then Prime Minister Abe at the ASEAN-Japan Summit in November 2019.
JICA has been supporting the introduction of renewable energies in Quang Tri Province through the “Quang Tri Province Onshore Wind Power Generation Project,” the “Phu Yen Province Solar Power Generation Project,” a subproject of the Asian Infrastructure Partnership Trust Fund established under the ADB, and the “Energy Conservation and Renewable Energy Promotion Project” under the yen loan program. The project is also supporting the introduction of renewable energy in the country. Based on this support, we will further encourage the development of renewable energy in the country by supporting renewable energy projects using private-sector funds through this project.
© Source JICA