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Thai giant acquires solar power project in Vietnam

Thai giant acquires solar power project in Vietnam

Monday 15, 06 2020
Along with the explosion of solar power projects, 2019 is considered to be the peak year of the 'underground waves' surrounding the race for additional licenses for solar power planning at all levels from central to localities.

The situation of license trading, project transfer to foreign investors has also appeared.

The Thai giant’s acquisition

Along with the rush of solar power projects, in recent days, a series of information on the fact that many investors with weak capacity are still acquiring large-scale renewable energy projects, then quickly turning to foreign investors to make profits has gradually appeared in many forums on renewable energy. Moreover, according to the announcement of foreign investors, the transfer of solar power projects in Vietnam is taking place very excitingly.

Most recently, the Board of Directors of Super Energy Corporation Company Limited (Super Energy) of Thailand announced that at the end of March 2020 they had sent a letter to the Thai Securities Commission announcing the decision to spend no more than 456.7 million USD on investment in 4 solar power plant projects, including Loc Ninh 1 (200 MW), Loc Ninh 2 (200 MW), Loc Ninh 3 (150 MW), and Loc Ninh 4 (200 MW) in Binh Phuoc Province (Vietnam).

According to the announcement, the investment in Loc Ninh 1 solar power project is 99.7 million USD, in Loc Ninh 2 is 140 million USD, in Loc Ninh 3 is 105 million USD, and in Loc Ninh 4 is 112 million USD.
In order to raise the ownership rate at which businesses implementing the four solar projects, the Super Energy project has to pay a total of 72.9 million USD as scheduled. In particular, the paid amount has been more than 5.7 million USD.

Specifically, the payment in March 2020 was 13,667 million USD, in June 2020 will be 32.4 million USD, and in November will be 11.6 million USD. Under the agreement, if the purchase price is different from the forecast of 7.09 US cents / kWh, the value of the stock will be adjusted according to the actual purchase price.

However, according to initial information, not all Vietnamese partners (believed by many to be subsidiaries of Hung Hai Group) will receive all this money. Currently, the first payment took place with the amount of 5,732 million USD. The remaining payments will be accompanied by detailed conditions such as the availability of land lease decision, construction permit, grid contract, land use right certificate, or certificate of eligibility for commercial electricity generation with the purchase price of 7.09 US cents / kWh, etc.

Notably, before acquiring the 4 aforementioned projects, the Thailand energy company has owned 6 solar energy projects in Vietnam. By March 2020, the total wattage of these 6 projects has reached 286.72 MW, equivalent to half of the combined total wattage of the 100 solar energy projects in Thailand owned by SEC.

The special thing is that all 6 energy projects in Vietnam previously acquired by Super Energy only have a return on investment of 12-13%. Moreover, power projects of the Loc Ninh project cluster have much higher EIRR, from 16.59% to 17.4%. In addition to solar power projects, the SEC also owns 4 wind power projects in Vietnam, in Bac Lieu, Soc Trang, Phu Yen, and Gia Lai provinces. These projects are expected to be fully or partially operational from Q4 / 2021.

Thai giant acquires solar power project in Vietnam

A series of projects fall into foreign hands

According to Tien Phong's understanding, through the form of a joint venture and transfer of shares with Vietnamese enterprises, many foreign energy and investment corporations have owned dozens of solar and wind power projects and enjoyed preferential rates of 9.35 cents / kWh for 20 years in Vietnam.

Among these are the two solar power plants TTC 1 and TTC 2 in Tay Ninh, invested and operated by Thanh Thanh Cong Group and Gulf Energy Group (Thailand) from the middle of 2019. 

At the time, the Thai corporation owned 49% of the capital, but in the latest change, Gulf had increased its holding to 90%. Mr. Prasert Thirati - Director of Gulf Vietnam is also the legal representative of TTC Green Energy Investment Joint Stock Company, Gulf Tay Ninh 1 Joint Stock Company, Gulf Tay Ninh 2. In addition to solar power projects in Tay Ninh, Thai Group also holds wind power projects in Ben Tre with 95% ownership.

In addition to the above-mentioned projects, Super Energy is also investing in the form of buying shares in solar power projects in Ninh Thuan, An Giang, etc. In addition to Thailand, many investors from Singapore, China, Philippines, etc. also own dozens of solar and wind power projects in Vietnam through the form of share purchase and joint venture.

Source: https://cafef.vn

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