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Wednesday, July 24, 2024

ADB provides US$13.8 million for rooftop solar projects in Vietnam

By Dat Thanh

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HCMC – The Asian Development Bank (ADB) has signed a US$13.8 million deal with GreenYellow Smart Solutions Vietnam Company (GreenYellow) to support rooftop photovoltaic (PV) solar systems.

This loan agreement will aid in developing and operating solar PV systems on the rooftops of commercial and industrial establishments across the country.

The financing package encompasses a US$3 million ADB ordinary capital resources loan, alongside US$10.8 million in parallel loans from FMO, a climate fund managed by ResponsAbility Investments AG and Societe Generale, with ADB serving as the mandated lead arranger.

The US$3 million grant from the Climate Innovation and Development Fund (CIDF) will be provided under ADB’s administration. This grant aims to attract an international commercial bank by addressing two crucial challenges in financing solar assets in Vietnam: the absence of long-term dong funding at a fixed interest rate and potential fluctuations in the dong-dollar exchange rate.

“As Asia and the Pacific’s climate bank, ADB is increasingly focused on mobilizing private capital to finance renewable energy projects that the region urgently needs,” said ADB Director General for Private Sector Operations Suzanne Gaboury.

“Solar PV rooftop offers an efficient way for Vietnam to deploy substantial amounts of additional renewable energy capacity while providing reliable, low-cost energy to consumers, which helps to attract and retain business and enhance Vietnam’s global competitiveness.”

This initiative represents ADB’s first investment in Vietnam’s commercial rooftop solar segment.

Rooftop solar is an emerging renewable energy source in Vietnam, hindered by high initial costs and limited funding sources. With a planned peak installed capacity of up to 32.3 megawatts, the project is poised to increase clean energy supply to the sector by a minimum of 31.5 gigawatt-hours annually, resulting in a reduction of 15,530 tons of carbon dioxide emissions by 2025.

Sebastien Prioux, GreenYellow Vietnam’s Chief Executive Officer, highlighted their commitment to development impact, saying “embedded within our core business is a profound commitment to development impact, and our collaboration with ADB uniquely aligns with our corporate mission toward innovative power distribution and driving energy transition.”

GreenYellow, founded in 2007, specializes in decentralized solar PV production, energy efficiency, storage, and monitoring services. Operating in 16 countries across Asia, Africa, Europe, and South America, it entered the Vietnam market in 2019.

The company focuses on developing, funding, and operating infrastructure projects to enable clients to produce local and competitive green power, reduce energy consumption, and accelerate decarbonization.

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