Keppel Group and Sovico Group cooperate on sustainable energy and urbanisation

President Nguyen Xuan Phuc joined the meeting with Loh Chin Hua, CEO of Keppel Group

On February 25, Keppel Group and Sovico Group signed two MoU to explore the development and rollout of energy and environmental solutions, as well as identify, develop, operate, and manage smart and sustainable projects in Vietnam’s key gateway cities, starting with Ho Chi Minh City and Hanoi.

The MoU were signed in the presence of President Nguyen Xuan Phuc, who is currently on a state visit to Singapore.

The collaboration marks a milestone in the strategic partnership between the two corporations – leveraging the strengths of Keppel, a powerhouse of solutions for sustainable urbanisation, as well as Sovico Group’s proven track record and presence across a wide range of businesses including banking and finance, real estate, aviation, and energy.

Loh Chin Hua, CEO of Keppel said, “Keppel is pleased to extend its collaboration with Sovico to provide sustainable energy and urbanisation solutions for Vietnam. Keppel has been investing in the country for over three decades, and we are glad to contribute further to its development. The signing of the MoU is very much in line with Keppel’s vision, in which we seek to provide solutions for sustainable urbanisation, among others.”

Pham Khac Dung, vice president of Sovico said, "We support the efforts of the UN towards sustainable development and are committed to extending our cooperation with like-minded partners across the globe. The partnership with Keppel further strengthens Sovico's development strategy. We are pleased and honoured to join Keppel in growing the Vietnam-Singapore strategic partnership to new heights; and expanding cooperation into new growth areas based on promoting solutions for people and people-centred developments, as well as creating eco-friendly developments that contribute to the prosperity and sustainable development of the two economies."

Sovico chairwoman Nguyen Thi Phuong Thao and CEO of Keppel Group Loh Chin Hua shook hands on their cooperation

Sustainable energy and decarbonisation solutions

Keppel Infrastructure Holdings Pte Ltd, through its wholly-owned subsidiary Keppel Energy Ventures Pte Ltd, signed the MoU with Sovico to harness sustainability-related technologies and develop end-to-end sustainable energy solutions, which include renewables, electrification, energy efficiency, as well as the treatment of domestic solid waste in support of Vietnam’s transition to a green and carbon-neutral economy.

The collaboration will focus on scalable decarbonisation solutions such as the electrification of vehicles and charging infrastructure, smart microgrids, sustainable energy-from-waste, and energy-as-a-service (EaaS), aimed at achieving large-scale greenhouse gas emissions reduction.

The parties will also collaborate on harnessing the vast renewable energy potential in Vietnam for the development of sustainable fuel for sectors like power, industrial, maritime transportation, and aviation, where carbon emissions may be harder to abate.

For aviation, sustainable fuel can for example be supplied to VietJet Air, which is majority-owned by Sovico. The synergistic development comes on the back of Keppel Infrastructure’s work to explore the feasibility of producing green ammonia in Australia for export to meet the rapidly growing demand for carbon-free energy. Green ammonia can be used as a direct feedstock in green energy generation, or as a hydrogen carrier to provide green hydrogen solutions.

Keppel Infrastructure’s EaaS, the first of its kind in the region, is a long-term subscription service with zero or minimal upfront capital investment, which includes power, energy storage, and the installation and operation of photovoltaic solar panels, super-efficient chiller systems, as well as smart electric vehicle charging stations. The initial roll-out in Vietnam will leverage Sovico’s large-scale commercial centres, office buildings, resorts, retail and urban residential areas across the country as well as extend to their ecosystem of customers and partners.

Urban development

Keppel Land Ltd., Keppel Urban Solutions, Sovico Group, and Phu Long Real Estate JSC – a member of Sovico Group – have signed an MoU to cooperate in urban development which covers collaboration on smart and sustainable projects across Vietnam, including infrastructure planning, placemaking, and township management services to create highly liveable, vibrant spaces and digitally-connected communities, starting with Mailand Hanoi City.

According to statistics from the Ministry of Foreign Affairs of Vietnam, Singapore has become the largest foreign investor in Vietnam with 402 newly-licensed projects and newly-registered capital of $11.4 billion since early 2020. The Vietnam-Singapore strategic partnership is expanding with increased partnerships and cooperations in many fields yielding positive results.

The abovementioned transactions are not expected to have any material impact on the earnings per share and net tangible asset per share of Keppel Corporation Ltd. for the financial year 2021 and the current one.