IFC and Armstrong Promote Renewable Energy in Vietnam by Investing in Local Hydropower Developer
IFC, a member of the World Bank Group, is supporting Vietnam’s renewable energy sector by investing in Gia Lai Electricity Joint Stock Company (GEC), together with Armstrong S.E. Clean Energy Fund (Armstrong), a dedicated renewable energy private equity fund based in Singapore.IFC and Armstrong will take a 16 and 20 percent equity stake in GEC, respectively and for both investors the partnership with GEC will be their first investment in Vietnam’s power sector. As shareholders, they will help the company expand its hydropower portfolio and invest in other renewable energy segments such as wind and solar power. GEC is one of the largest private sector hydropower players in Vietnam with 84.4 MW of installed capacity across 15 run-of-the-river small-scale hydro power plants.
“Support by IFC and Armstrong as shareholders will not only enable us to expand our core business in hydropower but also help us become a leading renewable energy company and provide sustainable alternatives to fossil fuel-based power generation in Vietnam,” said Le An Khang, CEO of GEC. “Their investment is a vote of confidence in Vietnam’s hydropower sector potential and should help attract more international investors.”Vietnam’s electricity consumption has outpaced twofold the country’s economic growth rate over the past few years. With an expanding renewable energy portfolio, GEC will contribute to the government’s goal of increasing Vietnam’s installed power capacity by 14 percent per annum between 2015 and 2030.
“We believe GEC is well positioned to capture the strong growth potential in Vietnam’s renewable energy sector,” said Andrew Affleck, Managing Partner of Armstrong. “Armstrong’s aim is to share the knowledge and experience we have gained from developing and constructing multiple renewable projects in neighboring South East Asian markets to help GEC to continue to build a leading position in Vietnam.”By developing sustainable hydropower and other renewable energy sources, GEC will help the country to meet its estimated 10 percent annual increase in power demand, diversify its energy mix and reduce its reliance on imported fossil fuels.
“We believe IFC’s investment is an important step to encourage other investors to tap into the rich potential of Vietnam’s green energy sector, where participation by foreign investors is still modest,” said Hyun-Chan Cho, IFC Head for Infrastructure and Natural Resources for Asia Pacific. “IFC’s global industry knowledge will help transform GEC into a role model for other emerging renewable energy players in Vietnam by showcasing industry best practices, while at the same time expanding supply of reliable and clean energy.”Hydroelectricity is the world’s largest source of renewable energy and accounts for one-fifth of the world’s electricity supply from all sources. Over the last decade, IFC has invested more than $1 billion in 75 hydropower projects in 25 countries across the world to promote hydropower’s responsible and sustainable development in developing countries.