A Private Financing Deal Helped Build Southeast Asia's Largest Floating Solar Project in Viet Nam
Video | 3 February 2020
- Watch: A Private Financing Deal Helped Build Southeast Asia's Largest Floating Solar Project in Viet Nam
- The 47.5 MW floating solar project will boost the share of renewable energy in Viet Nam's overall energy mix
- ADB partners with private sector client in Viet Nam to build a large-scale renewable project
A $37 million financing package from ADB, Canadian Climate Fund for the Private Sector in Asia, and Leading Asia’s Private Infrastructure Fund (LEAP) has assisted Da Nhim–Ham Thuan–Da Mi Hydro Power Joint Stock Company (DHD) to build the first large-scale floating solar PV panels in Viet Nam and the largest installation in Southeast Asia.
The 47.5 MW floating solar project supports Viet Nam’s commitment to boosting the share of renewable energy in the country’s overall energy mix. The increased supply of clean power to the domestic grid is expected to generate more than 60,000 megawatt-hours of electricity per year.
The solar panels are installed on the man-made reservoir of DHD’s existing 175 MW Da Mi hydropower plant. This innovative use of combining solar power and hydropower technologies is envisioned to be replicated elsewhere in Viet Nam and across Asia and the Pacific.
Da Mi, Viet Nam– Electricity demand in Viet Nam has grown rapidly, averaging 12% per year between 2005 – 2015. It is projected to grow at more than 8% through 2030.
"Viet Nam is classified as a developing country with rapid growth. GDP growth reached in average over 6.5% to 6.7% in the past ten years. Robust growth has increased demand for energy in general and electricity in particular," shares Ngo Son Hai, Vice-President, Electricity of Viet Nam.
Private sector investment is expected to boost the country’s generation capacity.
"To encourage the development of renewable energy the Government of Viet Nam issued various mechanisms and policies to attract more investors to develop renewable energy sources like wind and solar energy," continues Ngo San Hai.
About 90 solar power plants began operating in 2019 under a new feed-in tariff system. ADB is partnering with DHD, the leading Vietnamese SOE renewable energy producer, to install floating solar panels that will generate 47.5 megawatts of power. The panels were installed on a man-made reservoir at DHD’s Da Mi hydropower plant in the country’s southeast.
"The project implementation is shortened because Da Mi hydropower reservoir needed very little land clearance permission. And we now have a good combination of solar and hydropower to produce an efficient energy mix. For example, the solar power plant generates electricity during day time and the hydropower plant generates power during peak hours at night," explains Nguyen Trong Oanh, Chairman of the Board, DHD.
The project is the first large-scale installation of floating solar panels in Viet Nam and the largest installation in Southeast Asia.
"Renewable is a big focus for our business. Our focus is to first and foremost, clients that both have the technical and financial credit-worthiness to pursue renewable energy projects. It's a completely new legal and regulatory framework that some of these renewable energy projects have to enter into. They need our long-term financing, from ADB, blended with a certain percentage of concessional finance to make these projects bankable," states Jackie Surtani, Director, Infrastructure Finance Division 2 (East Asia, Southeast Asia, The Pacific), Private Sector Operations Department, ADB.
A loan of $17.6 million from ADB supports this project. Supplementary financing is also provided: $15 million from Canadian Climate Fund for Private Sector in Asia (CFPS) and $4.5 million from the Leading Asia’s Private Infrastructure Fund (LEAP).
This innovative project will significantly increase Viet Nam's solar generation capacity. And installation of the panels and construction of related facilities have also generated jobs and other economic opportunities for the local communities.