Coro Energy Plc., a London-based gas explorer, has signed a deal to become an independent power producer in the fast-growing Vietnamese energy market.
|Coro Energy enters the Vietnamese renewable energy market |
Accordingly, Coro and Vinh Phuc Energy JSC (VPE) have now inked a shareholder agreement to jointly develop VPE'sexisting 150MW portfolio of commercial and industrial rooftop solar PV installations creating a definitive joint venture (JV) agreement in Vietnam. Coro will fund the JV named Coro Renewables Vietnam for an 85 per cent equity interest whilst VPE will transfer its existing 150MW project portfolio for a 15 per cent carried interest. VPE will also provide engineering, procurement and construction (EPC) services to the JV at market benchmarked levels.
Meanwhile, Coro will fund $500,000 (specifically for planning and permitting costs) to de-risk a 5MW pilot project which is expected to achieve "Ready to Build" status during 2022. Coro will then have the right to fund the construction of the 5MW pilot project, estimated at $3.5 million, with a view to securing near term cash flows (estimated at around $600,000 per annum unlevered, net to Coro). Furthermore, Coro will have the option to fund the entire 150MW portfolio held by the JV, likely through project finance.
Mark Hood, Coro's CEO, commented that, "I am delighted to announce the entry of binding agreements in connection with our Vietnamese roof-top solar project, which moves Coro closer to maiden revenues with the pilot project and a step forward on our strategic goal of being a major regional player in Vietnam's renewables space."
Throughout the past two decades, Vietnam's GDP has grown in excess of 5 per cent per annum fuelling significant power demand growth. To meet this demand, Vietnam is now planning 15-20 per cent (approximately 35GW) of additional renewables capacity by 2030.
All rooftop projects developed by Coro Renewables Vietnam are expected to benefit from attractive economics and are underpinned by long-term "take or pay" power purchase agreements with creditworthy industrial customers and USD-denominated pricing