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Infrastructure & PPPs in Vietnam - Q1 2022 Update

VIETNAM continues to see new project developments across renewable energy, conventional energy (gas & LNG) and transport (with a focus on mobility options). There has been new partnerships between international project developers and local companies, to jointly develop solar projects in Vietnam across utility-scale and rooftop projects. In transport sector, we see activity in connectivity projects like logistics and railways.

Read the key developments in Infrastructure and PPPs in Vietnam in our latest insight.

 

January 2022

KOREA-LED VIETNAMESE LNG PROJECT TARGETS FINANCIAL CLOSE NEXT YEAR

A Korean-led group aims to reach financial close by end-2023 for a USD 2.3Bn liquefied natural gas (LNG) power plant in Vietnam.

The 1.5 GW Hai Lang project will be financed with about 75% debt and 25% equity. State-owned companies Korea Southern Power Co., Ltd. (KOSPO) and Korea Gas Corporation, and privately-held Hanwha Energy Corporation each own 20% of the project, while Vietnamese conglomerate T&T Group holds the balance. It will occupy more than 120ha and will include an LNG Terminal with a capacity of 1.5 million annually. The plant is set to start commercial operations in 2026 or 2027.


SK ECOPLANT AND NAMI SOLAR TO INVEST IN DISTRIBUTED SOLAR ENERGY IN VIETNAM

South Korea-based SK Eco plant Private Limited, a subsidiary of SK Group, has signed a joint development agreement with Nami Solar to invest in distributed solar energy in Vietnam. The partners plan to invest USD 200Mn over the next few years to deliver 250 MWp of rooftop solar installations across the country.

SK Eco plant has a 49% stake in it, with the remaining 51% held by Nami Sola. SK Eco plant will be in charge of the registration, issuance, conversion, sales, etc. of carbon emission rights, while Nami Sola will be tasked with business development, licensing, direct power purchase agreements (DPPAs), engineering, procurement and construction (EPC) and operations.


STUDIES ON E-TRANSPORTATION DEVELOPMENT TO BE CONDUCTED IN HO CHI MINH CITY

Ho Chi Minh City (HCMC) has been selected as the first site in Vietnam to conduct studies on the electric transportation development plan. The plan is a part of the country’s nationally determined contributions (NDC) with support from the Government of Germany to enhance capacity of the electric vehicle (EV) network as well as a legislative framework to facilitate development of e-transportation in line with low-carbon solutions.


TRUNGNAM GROUP COMMENCE OPERATION OF AN OFFSHORE WIND POWER PLANT IN VIETNAM

Trungnam Group, a renewable energy (RE) developer, has commenced commercial operation of its 100 MW offshore wind power plant in Vietnam. The VND 5Mn Dong Hai I wind power plant consists of 25 turbines off the coast of Duyen Hai District. The wind power plant is expected to contribute approximately 330 million KWh of wind power annually to Vietnam’s national grid.


MOT APPROVES VND 3TRN FOR RAILWAY MAINTENANCE WORK IN VIETNAM

Vietnam’s Ministry of Transport (MoT) has announced that the agency will spend VND 3Trn on railway maintenance works throughout the country during 2022. Out of the total amount approved, VND 2.69Trn will be allocated for regular maintenance works, VND 260 Bn for repairs due to natural disaster impacts and irregular problems, and VND 46 Bn for provisional expenses.


February 2022

VIETJET AND CAI PARTNER TO DEVELOP AVIATION SERVICES SUPPLY IN VIETNAM

SOVICO Group, Vietjet and Changi Airports International (CAI) have signed a USD 1.5 Bn partnership agreement to co-develop the supply of aviation services in Vietnam. The partners will undertake research and development of green, sustainable and smart infrastructure projects in the country.

The partnership is also expected to raise management standards to optimise airport-related operations, promote economic development and boost connectivity in Vietnam and in the region. The partnership aligns with the Southeast Asia (SEA) region’s goal to increase opportunities in the field of sustainable aviation.


IFC TO ADVISE ON USD 300 MN VIETNAM LOGISTICS PROJECT

The International Finance Corporation - the World Bank's financing arm - will help structure a USD 300Mn dry port project in northern Vietnam to improve its bankability.

The IFC will provide technical expertise for the development of the Vinh Phuc Inland Container Depot Logistics Center, also known as Vietnam SuperPort, a joint venture between Singapore-based YCH Group and Vietnamese conglomerate T&T Group. IFC also reserves the right to act as lead arranger for project financing.

The facility - located 60km from the Vietnamese capital of Hanoi - is set to start operations in 2024. It will cater to demand from 20 nearby industrial parks.

The 83ha development will be designed for a cargo capacity of about 850,000 twenty-foot equivalent units (TEU). It will aim to capture 10% of the total container traffic generated in the northern provinces of Vietnam as well as help reduce the country's high logistics costs, estimated at 21% of its gross domestic product. In comparison, the cost of logistics in the 38-member Organisation for Economic Co-operation and Development countries was less than 10%.


VNR TO REPAIR AND UPGRADE 41 RAILWAY STATIONS IN VIETNAM

Vietnam Railway Corporation (VNR) has announced plans to invest approximately VND 2.4Trn for the repair and upgradation of 41 railway stations across the country during the 2022–2023 period. The project will cover the repair and upgradation of station buildings, railway tracks, fences, pedestrian bridges, and other components at 32 passenger rail stations and nine freight stations.


NORTH-SOUTH EXPRESSWAY SEGMENT SECURES FINANCING WITH VIETNAMESE BANKS

A PPP section of Vietnam's North-South Expressway has secured a debt facility of VND 3.5Trn (USD 154Mn) from local banks.

The 49.3km Dien Chau-Bai Vot Expressway project received a loan from a consortium formed by the Bank for Investment and Development of Vietnam, Vietnam Bank for Agriculture and Rural Development, Bac A Bank and Vietcombank.

The facility has a tenor of 14 years and construction will take three years.

The government will provide VND 6Trn to fund construction, while the private partners will contribute VND 5Trn. The total project will cost VND 11.1Trn.

Vietnam announced that future segments of the North-South Expressway will be financed using private funds. The country has struggled to attract interest from local bidders and to raise debt for auctioned segments.

The country is planning to invest VND 119Trn until 2025 to build 729km of the road that will link Hanoi with Ho Chi Minh City and the Mekong Delta region.


XUAN CAU HOLDINGS TO BUILD TWO 225 MW SOLAR FACILITIES IN VIETNAM

Xuan Cau Holdings has announced plans to build two solar power plants with a capacity of 225 MW each at Dau Tieng Lake in Vietnam. The company will invest VND 3.56Trn to build the Dau Tieng 5.1 and Dau Tieng 5.2 solar power plants.

Construction is expected to commence in Q2 2022 with completion scheduled for 2023. The operational time of both projects is 50 years.


VALMET SECURES CONTRACT TO DELIVER A WASTE-TO-ENERGY PLANT IN VIETNAM

Finland-based Valmet has secured a USD 22.5-33.8Mn contract from Thang Long Energy Environment, a waste treatment company, to deliver systems for a greenfield waste-to-energy (WtE) plant in Bac Ninh province, Vietnam.

Valmet will supply its circulating fluidised bed boiler for the WtE project. Waste will be burned in the boiler to generate steam, which will be used to power a turbine generator. Valmet’s Flue Gas Cleaning System will also be installed to ensure that the turbines are clean and that the facility meets environmental sustainability requirements. Additionally, the company will also supply its DNA Distributed Control System to optimise the control and management of the WtE plant for increased efficiency.

TTCL Vietnam Corporation will undertake the engineering, procurement and construction (EPC) of the plant.

The WtE plant is scheduled to commence commercial operations by the end of 2023. The facility is expected to generate approximately 10 MW of energy, which will be supplied to Vietnam’s main grid to decrease intermittency.


CONSORTIUM SECURES USD 835MN CONTRACT TO BUILD TWO CC POWER PLANTS IN VIETNAM

A consortium comprising Samsung C&T and Lilama has secured an USD 835Mn contract from Petrovietnam Power to construct two combined cycle power plants in Vietnam. The consortium will oversee the construction of Nhon Trach 3 and 4 combined cycle power plants in the Ong Keo industrial park in Dong Nai. Both the facilities will have a combined generation capacity of 1,600 MW

Under the terms of the contract, Samsung C&T will construct gas and steam turbines, heat recovery boilers, substations, and power transmission lines for the two facilities. The plants will operate using liquefied natural gas (LNG). The Nhon Trach 3 plant is expected to commence commercial operation in the fourth quarter of 2023.


March 2022

VESTAS TO SUPPLY 100 MW WIND TURBINES IN VIETNAM

Denmark-based Vestas Wind Systems A/S (Vestas) has secured a contract to supply wind turbines with a combined capacity of 100 MW for a wind power project in Vietnam.

Vestas will supply, supervise the installation of and commission 24 units of its V150-4.2 MW turbines for a renewable project on the shore of the Mekong Delta. In addition to the supply of equipment, which will be delivered in a 4-MW operating mode, the contract also includes a 15-year Active Output Management 4000 (AOM 4000) service agreement.

The wind farm has its commissioning date set for the fourth quarter of 2022.


SINGAPORE UTILITY IN ALLIANCE FOR 50 MW VIETNAM ROOFTOP SOLAR

Singapore power utility SP Group has signed a memorandum of understanding (MoU) with CJ OliveNetworks Vina (CJ ONS) to jointly develop and operate solar projects in Vietnam.

SP Power and CJ ONS, a subsidiary of South Korea's CJ OliveNetworks, will build up to 50 MW of rooftop solar over the next two years.

The first plant will be a 2.5 MW rooftop installation for a manufacturing facility owned by CJ Vina Agri. The project will provide up to 3,577 MWh of electricity annually, or about 20% of the total power consumed by the facility at peak load. It is set to start operations in June 2022.


VIETNAM AND LAOS AGREE 2,500 MW RENEWABLES PARTNERSHIP

Vietnamese private corporation T&T Group and Lao's developer Phongsubthavy Group have struck an agreement to develop 2,500 MW of renewable energy in Laos and transmit the power to Vietnam, the Hanoi Times reported on 26 March 2022.

The companies will join the project development process including the feasibility study, environmental assessment impact report and construction and T&T Group will seek funding for the project.

Vietnam is looking to buy 3,000-5,000 MW of power from Laos in the 10-year period through 2030.


FLC AND PETROTRADE TO CONSTRUCT USD 5BN RAIL LINE BETWEEN LAOS AND VIETNAM

FLC Group has signed a memorandum of understanding (MoU) with Petroleum Trading Lao Public Company (Petrotrade) to construct a rail network in Vientiane connecting Vietnam and Laos. The 555 km rail project from Vientiane in Laos to Vung Ang Port in Vietnam is expected to cost approximately USD 5Bn and construction is scheduled to commence during Q4 2022.

FLC will undertake construction work on the 103 km stretch from the Cha Lo border to the Vung Ang seaport while the Laos section of the line will be built by PetroTrade.


VIETNAM'S VIMC PROPOSES USD 850MN TRANSSHIPMENT PORT

Shipping conglomerate Vietnam Maritime Corporation (VIMC) has proposed investing in, constructing and operating an international container transhipment port in Can Gio district.

The facility, with a capacity of 15 million TEUs, will service the Ho Chi Minh City area. It will need a total investment of USD 850Mn.

VIMC plans to have its subsidiary, Saigon Port, partner with Geneva-based Mediterranean Shipping Company (MSC) for the project.


SEMBCORP PLANS SOLAR PROJECT IN VIETNAM INDUSTRIAL PARK

A Vietnamese joint venture of Singapore-based Sembcorp Industries is evaluating the development of a 50 MW solar power project in an industrial park in Binh Duong province.

Vietnam-Singapore Smart Energy Solutions, a company jointly owned by Sembcorp, Vietnam's Becamex IDC Corporation and the Vietnam Singapore Industrial Park (VSIP), is conducting technical evaluations for the proposed development that will occupy 50 ha.

The solar project will need the Vietnamese government's approval and the timeline to complete construction and start operations will be based on the needs of its customers in the industrial park. One of the buyers of power will be Danish toymaker LEGO Group.

The planned solar development is part of the third phase of expansion of the industrial park - VSIP Binh Duong III - being developed as a sustainable facility incorporating smart technology and clean power. It will include micro-grid-integrated solar and battery storage, wastewater recovery and electric vehicle charging infrastructure.

Power utility and urban infrastructure developer Sembcorp is a co-master developer of all VSIP projects with a 51% ownership with Becamex holding the remaining 49%.


VIETNAM'S IPPG SEEKS APPROVAL FOR AIRPORT EXPANSION PROJECT PARTICIPATION

Vietnamese luxury retail conglomerate Imex Pan Pacific Group (IPPG) has requested approval from the Ministry of Transport to participate in the Phu Quoc International Airport upgrade project off the coast of Kien Giang province.

The company is looking to invest in the airport’s international and cargo terminals, warehouse and runway. The proposal comes after the government’s decision to seek private sector investment to develop parts of the aerodrome.

IPPG was previously involved in developing the international terminal at the Cam Ranh airport in the south-central province of Khanh Hoa. It invested almost VND 3.74Trn (USD 163.86Mn).


THAILAND'S BANPU ACQUIRES STAKE IN VIETNAM ROOFTOP SOLAR DEVELOPER

Thai power developer Banpu's renewables unit has agreed to acquire a 49.04% stake in Vietnamese rooftop solar developer Solar Esco for THB 466Mn (USD 14.5Mn).

The transaction is expected to close during the second quarter in 2022. Solar Esco is Banpu's first C&I solar investment in Vietnam, which is a strategic market for Banpu.


NORFUND BUYS 35% STAKE IN NORSK'S VIETNAMESE SOLAR PORTFOLIO

Norwegian sovereign fund Norfund is acquiring 35% of an 11 MW rooftop solar photovoltaic (PV) plant portfolio recently constructed by Norsk Solar in Vietnam.

Other investors in the PV project include Nordic Impact Cooperation (NIC) - a joint venture between Norsk Solar and Finnfund.

Under NIC, EUR 15Mn (USD 16.68Mn) has been earmarked exclusively for Norsk Solar projects within the corporate and industrial segment and other related projects across developing markets.

The portfolio consists of 11 solar power facilities built on top of shopping centres owned by Central Retail. A long-term power purchase agreement has been signed with Norsk Solar.


JERA ESTABLISHES ENERGY SUBSIDIARY IN HANOI

Japanese energy company JERA has set up a subsidiary in Hanoi to serve as its base of operations in Vietnam.

The new unit, called JERA Energy Vietnam (JERA EV), will be responsible for furthering the LNG-to-power projects in the country that are now under consideration, as well for exploring new projects, including those in renewable energy, and for gathering information.


SEMBCORP INDUSTRIES INKS AGREEMENTS ON RENEWABLE ENERGY AND SUSTAINABLE DEVELOPMENT WITH VIETNAM

Sembcorp Industries (Sembcorp) is pleased to announce that it has inked several partnerships to develop a range of energy and urban solutions that will support Vietnam’s energy transition and sustainable development.

The areas of collaborations include:

· Sustainable industrial park development;

· Sustainable and reliable power system;

· Renewable energy and technology; and

· Skills and capabilities building.


 

List of Key Transactions - Q1 2022

Source: Inframation, YOG INFRA analysis

 

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