Rooftop solar energy attracts Omani investors

Oman Investment Fund and CME signing the deal

Vietnam's commercial and industrial rooftop solar energy sector is projected to grow significantly in the near future. Furthermore, the sector is currently attracting many reputable names in the world and thereby promising a competitive and fair playing field. The national grid and industrial companies in Vietnam consuming renewable energy are expected to be the biggest beneficiaries.

For the first eight months of 2020, Electricity of Vietnam (EVN) recorded a total of 7.27 billion kWh from renewable energy, of which 6.39 billion kWh is from solar power. The number is 2.94 times higher than the number recorder for the same period in 2019. The total capacity connected to the grid for the years of 2019 and 2020 for the whole country was expected to reach nearly 12GWp which is approximately 12 per cent of renewable energy in Vietnam's electricity output. Moreover, Vietnam is the fastest-growing country in the renewable energy field in Southeast Asia, especially for the rooftop solar PV market. The total output for rooftop solar energy, however, is less than 800MWp as of August 2020, a relatively low number given that the potential output capacity of the commercial and industrial rooftop solar (C&I) segment in Vietnam is over 20GWp.

After the entrance of a number of reputable companies such as Sembcorp (Singapore), Total (France), TPG (USA), the Vietnam Rooftop Solar Market welcomes a new participant – Oman Investment Authority (the Sovereign Wealth Fund of the Sultanate of Oman) through its investment joint venture with the Vietnamese government – the Vietnam-Oman Investment Fund (VOI). VOI has recently completed its strategic investment in Copper Mountain Energy Company (CME). Furthermore, the two organisations have signed a strategic cooperation agreement in the renewable energy sector. The strategic agreement between VOI and CME was signed in the presence of His Excellency Saleh Mohamed Ahmed Al Suqri, the Ambassador of the Sultanate of Oman in Vietnam. Under this agreement, VOI and CME will focus on expanding the market share for rooftop solar energy in the C&I segment, especially for Vietnamese and FDI enterprises with large demand for renewable energy consumption and the application of technology for energy saving. According to this agreement, VOI, as a strategic investor, will support CME in both capital and market penetration not just in Omani-invested and enterprises in Vietnam but also in enterprises in the ASEAN region.

Ambassador of the Kingdom of Oman in Vietnam, leaders of VOI Fund and CME visited the project invested by CME at Saigon Cargo Services Corporation SCSC - located in Tan Son Nhat International Airport, Ho Chi Minh City

At the signing event, the Ambassador said, “We have high expectations for VOI's investments in infrastructure, especially in the renewable energy sector because it is not only the global trend that helps reduce overall CO2 emissions but it also directly solves the electricity shortage problem in Vietnam. Therefore, these projects and investments are strongly encouraged by the governments of our countries.”

“The strong development of C&I rooftop solar energy is important for Vietnam, given the presence of many multinational corporations and OEMs for major brands around the world and with many expected to move to Vietnam in the near future,” the Ambassador added. “These companies will need to meet a certain amount of renewable energy committed with end-users. In addition, appropriate policies and human resources make Vietnam an attractive and reliable destination in the region for FDI and global brands.”

Within the energy sector, VOI is an experienced investor in Vietnam with investments in Vinh Son-Song Hinh Hydropower project and Long An Solar Farm project with capacities of 66 and 141MWp, respectively. In addition to entering the rooftop solar segment through CME, VOI also aims to participate in other environmentally-friendly energy market segments such as wind power and liquified natural gas (LNG) projects.

Sharing with VIR, Nguyen Xuan Giao, managing director in charge of VOI said, “As a representative for the Sovereign Wealth Fund of the Sultanate of Oman in Vietnam, our investment strategy for the renewable energy sector is, in addition to the support of the government and the provinces, to have capable and reputable companies as strategic partners on the challenging journey. The reason is because infrastructure projects require the partners to have a long-term outlook and vision together with execution capability on a daily basis.”

At CME, we find key success factors and strong commitment required for a long-term partnership. Therefore, after the success with two solar farm projects in Thanh Hoa district of Long An province, we decided to continue our journey with CME and expand our investment in the C&I rooftop solar energy market. We expect this joint venture will continue to solidify its leading position in this high-growth, and technically and quality demanding market. We aim to build CME as the leading C&I rooftop solar energy platform not only in Vietnam but also in the region.”

The many advantages provided by rooftop solar energy – such as releasing on-site load capacity for industrial areas with severe power shortage, reducing transmission loss and pressure on transmission networks that have not been upgraded yet by EVN and especially, creating a clean energy source for environmentally-conscious companies that can obtain clean energy certificates required for markets such as North America and Europe – is expected to spur the growth of industrial development, especially in the FDI sector, and attract global names such as Apple, Samsung, Intel, Adidas, Nike, Ikea, and Uniqlo, among others. The growth of this market with many domestic investors and the world's leading energy corporations is expected to bring about many new developments and products where the beneficiaries are not only industrial enterprises, the national grid but also the overall national competitiveness.