IFC cooperates with REE to support wind projects to advance renewable energy in Vietnam

The on-going construction of Loi Hai 2 wind power plant in Ninh Thuan province

IFC is providing a financing package of $57 million to Thuan Binh Wind Power JSC (TBW), a subsidiary of Refrigeration Electrical Engineering Corporation (REE). This will enable the construction of two onshore wind power plants – Phu Lac 2 in Binh Thuan province and Loi Hai 2 in Ninh Thuan province – with a total capacity of 54.2MW. The plants will generate about 170 million kWh of clean energy per year once they start operating later in 2021.

A dedicated wind power company founded in 2009, TBW developed the 24-MW Phu Lac 1 plant in Binh Thuan province, one of the first wind power plants in Vietnam. With a large pipeline of wind and solar power projects, the financing package from IFC will help the company channel that renewable energy potential into operation.

The financing package from IFC includes financing mobilised by the multi-investor Managed Co-Lending Portfolio Program (MCPP), managed by IFC’s innovative syndications platform, which allows institutional partners to commit funds for a set of future IFC loans.

“As REE expands its footprint in renewable energy, we are looking for long-term US dollar-based financing that is not readily available in the local market. We are confident that IFC’s support will help us implement a strategic drive to green our power sector portfolio in the coming years. By agreeing to implement IFC’s financial, environmental, and social requirements, REE confirms its readiness and willingness to contribute to Vietnam’s renewable energy development,” said Nguyen Ngoc Thai Binh, REE deputy CEO.

Leveraging its global experience in wind projects, IFC will help ensure that these two projects follow best industry as well as environmental, social, and governance practices.

“The wind power sector in Vietnam is still in its nascent stage but has very large-scale potential. IFC’s engagement will demonstrate viability to investors and help mobilise the much-needed funding to help realise Vietnam’s cleaner, renewable energy potential,” said Kyle Kelhofer, IFC’s country manager for Vietnam, Cambodia, and Lao PDR.

He added, “IFC is especially committed to supporting solid local corporates such as REE to scale up their renewable energy investments, supporting the country’s transition to a lower-carbon electricity generation mix.”

Driven by robust economic growth, Vietnam foresees the need for a twofold expansion of its installed power capacity by 2030 to meet increasing electricity demand. Renewable energy capacity including rooftop solar is projected to increase by approximately 19GW to more than 36GW over the coming decade, at an estimated cost of around $20 billion, mostly expected to be developed and funded by the private sector.