Japan-based Chubu Electric Power Co., Inc. will purchase a 20 per cent stake in Bitexco Power Corporation, a subsidiary of Bitexco.
|This is the first investment by Chubu in Vietnam |
As of February 2021, Bitexco Power Corporation (BPC) owned and managed 21 hydropower plants and one solar power plant with a combined gross generating capacity of 1,038MW in Vietnam. BPC is currently a leading renewable energy firm focusing on hydropower and solar PV generation in Vietnam's private sector.
Chubu has successfully completed a share purchase agreement with several shareholders as well as a share subscription agreement with BPC. After the agreements are completed, Chubu will also establish a shareholders' agreement with BPC and Bitexco Investment Corporation (the majority shareholder of BPC).
Chubu will become a 20 per cent shareholder in BPC if necessary regulatory permissions are obtained. This is Chubu's first investment both in Vietnam and abroad in a hydropower enterprise.
As of December 2020, around 2,000 Japanese firms have established business operations in Vietnam. As the country is experiencing rapid population expansion and economic development, electricity demand is likely to continue to rise. According to the proposed Power Development Master Plan (PDP8) for 2021-2030 presented by the Ministry of Industry and Trade of Vietnam, energy demand is predicted to rise to 491.3TWh (annual average growth rate of 8.5 per cent) in 2030, up from 216.8TWh in 2020.
Furthermore, compared to other ASEAN countries, Vietnam has a high renewable energy potential because many parts of the country have ample solar radiation and favourable wind conditions both onshore and offshore. The Vietnamese government has also indicated that it intends to raise the country's renewable energy ratio, implying that the renewable energy sector would continue to grow.
The Japanese firm will work to maximise the company value of BPC by utilising the technology and expertise related to hydropower maintenance that it has accumulated over 70 years in Japan. With the anticipated continuing expansion of renewable energy in Vietnam, by becoming a vital partner of BPC, Chubu will contribute to the realisation of a carbon-neutral society.