Vietnam’s TTC Group, a sugar, energy, real estate and tourism conglomerate, is planning to spend as much as $1 billion on an ambitious plan to build one of the country’s largest portfolio of solar projects in an effort to capitalize on the nation’s growing power needs.
“Solar energy is very hot right now as the recent pricing set by the government is reasonable, development costs are much cheaper and coal-fired power plants have caused so many concerns,” Chief Executive Officer Thai Van Chuyen said in an interview at the company’s headquarters. “Vietnam always needs more power every year for its expanding economy.”
The Ho Chi Minh City-based company is looking for new investors for 10 to 20 solar parks it expects to have in operation by 2018, Chuyen said. The company, which will fund 30 percent of the project, is in talks with banks and financial institutions for the remainder of the funds needed for the parks, which would account for total capacity of as much as 1,000 megawatts, he said.
TTC’s interest in solar marks an expansion into clean energy in a country that relies on hydropower for most of its renewable capacity. Vietnam is also facing a power gap. The country will need to invest $74 billion in coal, gas, wind, solar and hydro power plants through 2025 as power demand doubles, Bloomberg New Energy Finance wrote in a report in March.
Power Gap
To address the power gap, Vietnam’s government has vowed to boost the country’s installed power capacity by 14 percent annually between 2015 and 2030.
TTC Group’s Gia Lai Electricity JSC unit will oversee the development of 800 megawatts of the solar projects, Chuyen said. Related, the subsidiary is seeking mergers and acquisitions in hydropower and wind power in an effort to lead the nation’s green energy sector by 2020, said Chuyen, who’s also chairman of the unit.
Gia Lai Electricity, in which International Finance Corp. and Armstrong Asset Management hold a combined stake of 36 percent, plans to remove the 49 percent ceiling from its foreign ownership limit, Chuyen said, without elaborating on the timing.
Gia Lai Electricity also plans to acquire a 51 percent stake in a 40-megawatt wind power project in a central-region province this year, according to the group’s CEO.
The unit, whose shares are traded on the Hanoi Stock Exchange’s Unlisted Public Market, expects to list shares on the Ho Chi Minh City Stock Exchange in 2020 and looks to raise registered capital nearly sixfold to more than 4.1 trillion dong ($181 million) through 2020.
TTC Sugar, which plans a Singapore listing in two years, will develop 200 megawatts of the solar projects, Chuyen said.