HSBC lends $23.3 million to Malaysia’s Leader Energy for Vietnam renewable energy portfolio

by
Minh Anh

Monday, July 8, 2024 4:01 PM (GMT+7)

HSBC Vietnam and Malaysia’s Leader Energy Holdings Bhd (Leader Energy) have signed a VND593 billion ($23.33 million) loan agreement to develop solar power projects in the country.

Representatives from HSBC Vietnam and Leader Energy sign a green finance agreement in Ho Chi Minh City on July 8, 2024. Photo courtesy of HSBC.

HSBC Vietnam said in a statement on Monday that the deal marks the bank’s second transaction for Leader Energy in Vietnam, following a hydropower plant deal in 2017.

The new seven-year loan to a wholly owned subsidiary of HNG Capital will be used to help refinance Leader Energy’s recently acquired 50MW solar power plant, Vinhao 6 (VH6).

Located in Binh Thuan Province in south-central Vietnam, the project began commercial operations in 2019 and generates 100% of its revenues from selling electricity at a feed-in tariff (FiT) of 9.35 US cents/kWh to state-owned electricity utility Electricity of Vietnam (EVN) under a 20-year power purchase agreement (PPA).

The project will generate 83,000 MWh of electricity and offset 75,131 tonnes of carbon dioxide emissions per year.

VH6 was fully acquired by Leader Energy in 2023. The acquisition is part of Leader Energy’s plan to own more than 500MW of renewable energy assets in Vietnam, the company said.

The bank said the deal demonstrates Vietnam’s renewable energy potential, given favorable terms and the government’s commitment to achieving net-zero emissions by 2050.

Following this commitment at COP26, Vietnam is looking to double down on its energy transition, as the sector accounts for more than half of the country’s greenhouse gas emissions. Moreover, the country’s natural resources offer great potential to attract further investment in its growing renewable energy sector, officials say.

“Contributing to the energy transition is a key element of Leader Energy’s strategy to mitigate climate change and promote sustainable development. The group is expanding its renewable energy portfolio to contribute to Vietnam’s goal of achieving net-zero greenhouse gas emissions by 2050,” said Jeannie Ng, CFO of Leader Energy.

Ahmed Yeganeh, country head of wholesale banking at HSBC Vietnam, said: “This transaction demonstrates that the financial sector can play an active role in unlocking Vietnam’s renewable energy potential while supporting businesses’ sustainable growth ambitions.”

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