Armstrong S.E. Clean Energy Fund, a $164 million clean energy vehicle closed in 2013, has bought a 20 percent stake in Gia Lai Electricity Joint Stock Company, while IFC acquired a 16 percent share. No further financial details were disclosed.
As shareholders, both parties aim to help the developer expand its hydropower portfolio and invest in other renewable energy segments, such as wind and solar power, IFC said in a statement.
“Support by IFC and Armstrong as shareholders will not only enable us to expand our core business in hydropower but also help us become a leading renewable energy company and provide sustainable alternatives to fossil fuel-based power generation in Vietnam,” said Le An Khang, chief executive of GEC.
“Their investment is a vote of confidence in Vietnam’s hydropower sector potential and should help attract more international investors.”
GEC is one of the largest private sector hydropower players in the country with 84.4 MW of installed capacity across 15 run-of-the-river plants. The company's efforts form part of the government’s goal of increasing Vietnam’s installed power capacity by 14 percent per annum between 2015 and 2030.
“Armstrong’s aim is to share the knowledge and experience we have gained from developing and constructing multiple renewable projects in neighboring South East Asian markets to help GEC to continue to build a leading position in Vietnam,” said Andrew Affleck, managing partner of Armstrong.
“We believe IFC’s investment is an important step to encourage other investors to tap into the rich potential of Vietnam’s green energy sector, where participation by foreign investors is still modest,” added Hyun-Chan Cho, IFC head for infrastructure and natural resources for Asia Pacific.
Hydro, the world’s largest source of renewable power, accounts for one-fifth of the world’s electricity supply from all sources, according to IFC. Over the last decade, the institution has invested more than $1 billion in 75 hydropower projects in 25 countries.