Shifting away from coal

As one of the fastest-growing economies in Southeast Asia, Vietnam is demonstrating its seriousness in pursuing a shift from a coal dominant economy to one based on renewable energy sources. More than half of Vietnam’s electricity generation came from coal in 2020; wind and solar made up 5% of the country’s electricity generation. Expanding renewable energy capacity will help Vietnam rely less on coal, reduce carbon emissions and increase electricity capacity to meet the country’s growing electricity needs.

There is a clear urgency for this green energy ambition: economic growth is driving up energy consumption at an extraordinary rate and the country’s reliance on fossil fuels means the power sector alone accounts for nearly two-thirds of the country’s greenhouse gas emissions.

Increasing wind power capacity

With an installed power capacity of 144 MW, the Lotus Wind Power Project is the largest of its kind in Vietnam, consisting of three separate 48 MW farms, each with 12 Vestas wind turbines. Construction of the farms started in 2020 and operations commenced in November 2021. The project will increase Vietnam’s wind power capacity by 30%.

The total project will generate an average of 422 gigawatt-hours of electricity and avoid an average of 162,430 tons of CO2 emissions annually. Furthermore, a gender action plan under the project will provide women from the local community with access to training on wind power operation and management.

The wind farms are located in the Quang Tri Province in Central Vietnam, an area that is set to become a ‘hub’ for wind energy development because of its favourable wind resource conditions.

Fund Manager Angeles Toledo: “Without doubt, there is strong potential for the renewable energy sector in Vietnam, especially as the sector is receiving great attention from policy makers, innovative businesses and foreign investors. Developing the renewable energy sector is the most sustainable solution to tackle the energy crisis issue in emerging economies like Vietnam. The Lotus Wind Power Project further complements Triodos’ extensive experience with renewable energy projects in the emerging markets.”

Deal structure

The Asian Development Bank (ADB) is the lead arranger of the USD 116 million green loan facility to build and operate the three wind farms. The ADB loan comprises a USD 35 million A loan directly funded by ADB and a USD 81 million syndicated B loan. In addition to Triodos Emerging Markets Renewable Energy Fund and Triodos Groenfonds, other B loan participants are Bank of China (Hong Kong) Limited, Bank of China Limited Macau Branch, and Société Générale Singapore Branch. Also read ADB’s press release.