Issuing green bond insurance and implementing M&A deals are two popular solutions to mobilise investment capital for clean energy, including wind power projects.
This was shared by Ashish Sethia, head of APAC Analysis and Consulting, Bloomberg New Energy Finance at the workshop on “Accelerating Wind Project Financing in Vietnam”, which is part of the second Vietnam Wind Power Conference in Hanoi on June 11-12, 2019, organised by the Global Wind Energy Council in partnership with GIZ and the Danish and Irish embassies.
Vietnam is one of the most exciting wind power markets in Southeast Asia and has developed into a hotspot of development for both onshore and offshore wind.
Increasingly, wind acts as a catalyst for investment and growth in high-tech industries, as leading companies look to respond to demand from their consumers, ensure stable electricity prices, and produce goods and services using clean power.
In general, a wind power project needs a large investment volume. However, there are numerous risks that foreign investors have to face in power purchase agreements (PPA), making them difficult to mobilise capital to develop their projects.
“The breakthrough of wind power created an investment wave in this sector, including enterprises operating outside this sector. In addition, the provinces approved massive projects even as the connection to the national grid is lacking. These factors made banks reluctant to issue loans to investors whose lack of requisite experience makes their projects unfeasible,” said Hoang Phuong, investment banker from Techcombank Vietnam.
In the framework of the workshop, along with clarifying the current challenges of financing wind projects in Vietnam, experts explained risk profiles by different types of banks as well as their mitigation strategies.
Besides, in the framework of Vietnam Wind Power 2019, experts from the European Union, Ireland and Denmark shared the latest technology and industry experience with Vietnam to help the country fulfill its goals for a greener future.