The Asian Development Bank (ADB) has signed a $37 million loan agreement that would finance the installation of a 47.5 MW floating solar project in Vietnam.

The global lender has signed the agreement with Da Nhim–Ham Thuan–Da Mi Hydro Power Joint Stock Company (DHD) to facilitate the floating solar installation on the man-made reservoir of DHD’s existing 175 MW Da Mi hydropower project.

DHD, a subsidiary of the Viet Nam Electricity (EVN) Power Generation Corporation 1, currently owns and operates four hydropower projects: Da Mi (175 MW), Ham Thuan (300 MW), Da Nhim (160 MW), and Song Pha (7.5 MW). DHD’s total generation capacity is 642.5 MW, which is about 1.7% of Vietnam’s total generation capacity.

This project marks the first large-scale floating solar project installation in Vietnam and the largest installation in Southeast Asia, according to ADB’s media statement.

“This project will help to boost the share of renewable energy in Vietnam’s overall energy mix and decrease the dependence on imported fossil fuels such as coal,” said ADB Private Sector Operations Department Deputy Director General Mr. Christopher Thieme. “The pairing of these two clean energy technologies—hydropower and solar—is a simple but highly innovative achievement, which can be replicated elsewhere in Vietnam and across Asia and the Pacific.”

The financing package includes a $17.6 million loan from ADB’s ordinary capital resources. This is supplemented by $15 million of blended concessional co-financing provided by the Canadian Climate Fund for the Private Sector in Asia and its follow-on fund, the Canadian Climate Fund for the Private Sector in Asia II. These funds were established by the Government of Canada to encourage private investment in climate change mitigation and adaptation projects in Asia and the Pacific. The package also includes a $4.4 million parallel loan from the Leading Asia’s Private Infrastructure Fund (LEAP), supported by Japan International Cooperation Agency through a $1.5 billion equity commitment.

ADB, which has 68 members, has been at the forefront of facilitating the expansion of sustainable projects across the globe. According to ADB, in 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.

Vietnam has become an important destination for investment in renewable energy for companies seeking new markets.  Earlier this year, Mercom reported that EVN has been accelerating the completion of 61 solar power projects so that by the end of June 2019, a total of 88 solar power projects can be connected to the national grid.

Last year, Dai Hai Power was developing a 100 MW solar project near the northwest of Buon Me Thuot City in Vietnam. Dai Hai Power expects to generate 150 GWh of clean energy annually.

In February 2018, the Asian Development Bank (ADB) announced that it would provide a $235 million loan to B. Grimm Power Public Company Limited for the expansion of renewable energy projects in the member countries of the Association of Southeast Asian Nations (ASEAN).

Image credit: Ocean Sun