Japanese investors venturing into Vietnam's renewable energy market

More Japanese investors are entering renewable energy production in Vietnam

Marubeni Green Power Vietnam, a wholly-owned subsidiary of Japan-based Marubeni Corporation has just signed a corporate power purchase agreement (PPA) with Ajinomoto Vietnam Co., Ltd. in which Marubeni Green Power (MAGPOV) will supply electricity generated by a rooftop solar PV system in Vietnam.

By supplying renewable energy generated from a solar PV system built on the roof of Ajinomoto Vietnam's Long Thanh facility in Dong Nai province, MAGPOV Vietnam hopes to contribute to Ajinomoto Vietnam's carbon dioxide emissions reduction and decarbonisation.

The Japanese Ministry of the Environment has chosen this project as part of its Financing Programme for Joint Crediting Mechanism in FY2021, and it will be carried out in collaboration with the Vietnamese and Japanese governments. Marubeni will continue to promote the decarbonisation of the supply chain of companies in Vietnam by introducing rooftop solar PV systems.

Marubeni is expanding this business to provide renewable energy to commercial and industrial customers by installing, owning, and operating solar PV systems on the roofs of their factories and/or warehouses without requiring any upfront investment from the customers in Vietnam.

Marubeni owns holdings in power projects in 19 countries (including Japan), totalling around 12GW of net capacity. Marubeni will strengthen and expand its efforts in the field of power service business by expanding its decentralised power generation business and contribute to the achievement of net-zero greenhouse gas emissions by 2050 and the realisation of low-carbon and decarbonisation through each project.

The potential of Vietnam's renewable energy market is luring more Japanese companies. In October, Sojitz Corporation and Osaka Gas Corporation have formed a new joint venture with Looop Inc., a Tokyo-based electric power startup, to begin a rooftop solar power company in Vietnam for industrial and commercial customers. SOL Energy Co., established in Dong Nai province, owned 70 per cent by Sojitz Osaka Gas Energy Co., an existing joint venture between Sojitz and Osaka Gas, and 30 per cent by Looop.

In May, the Japan International Cooperation Agency (JICA) also signed a facility agreement to provide up to $25 million for the construction of wind energy projects in Vietnam together with other co-sponsors namely the Asian Development Bank (ADB) and the Australian Export Finance (EFA). This project is JICA’s first funding for wind power generation in Vietnam and is expected to serve as a model case for private-sector wind power generation projects in the renewable energy sector in Vietnam, including those by Japanese and local companies.