ADB inks deal to finance first large-scale floating solar power plant in Vietnam

The Asian Development Bank (ADB) on October 2 signed a 37 million USD loan agreement with Da Nhim–Ham Thuan–Da Mi Hydro Power JSC to finance the installation of a 47.5 MWp floating photovoltaic (PV) solar power facility on the man-made reservoir of DHD’s existing Da Mi hydropower plant.

DHD’s general director Le Van Quang and Christopher Thieme from ADB after the signing agreement. (Photo courtesy of ADB)

The project marks the first large-scale installation of floating solar PV panels in Vietnam and the largest installation in Southeast Asia, according to ADB’s press release.

“This project will help to boost the share of renewable energy in Vietnam’s overall energy mix and decrease the dependence on imported fossil fuels such as coal,” said ADB Private Sector Operations Department Deputy Director General Christopher Thieme.

He added that the pairing of those two clean energy technologies — hydropower and solar — is a simple but a highly innovative achievement which can be replicated elsewhere in Vietnam and across Asia and Pacific.

DHD, a subsidiary of the Vietnam Electricity (EVN) Power Generation Corporation 1, currently owns and operates four hydropower plants: Da Mi (175 MW), Ham Thuan (300 MW), Da Nhim (160 MW), and Song Pha (7.5 MW). DHD’s total generation capacity is 642.5 MW, about 1.7 percent of Vietnam’s total generation capacity.

“We are proud to be the first company in Vietnam to construct a floating solar power plant on a hydropower reservoir,” said the Chairman of the Board of DHD Nguyen Trong Oanh. “This project aligns with DHD’s strategy of investing in renewable energy to decrease dependence on fossil fuel, contribute to energy security, mitigate climate change, and promote environmental protection and sustainable socio-economic development. Hydropower reservoirs in southern Vietnam have vast solar power potential. Capitalizing on the strong relationship between EVN and ADB, we have worked together to catalyze a new source of power for the country.”

The financing package includes a 17.6 million USD loan from ADB’s ordinary capital resources. This is supplemented by 15 million USD of blended concessional cofinancing provided by the Canadian Climate Fund for the Private Sector in Asia and its follow-on fund, the Canadian Climate Fund for the Private Sector in Asia II. These funds were established by the Government of Canada to encourage private investment in climate change mitigation and adaptation projects in Asia and the Pacific.

The package also includes a 4.4 million USD parallel loan from the Leading Asia’s Private Infrastructure Fund (LEAP), supported by the Japan International Cooperation Agency through a 1.5 billion USD equity commitment. LEAP is focused on delivering high quality and sustainable private sector infrastructure projects that reduce carbon emissions, improve energy efficiency, and offer accessible and affordable health care, education, and communication services to ADB’s developing member countries.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to 21.6 billion USD. Established in 1966, it is owned by 68 members - 49 from the region.