InfraCo Asia mulls Vietnam hydro stake sale

The firm believes the operating hydro plant represents an attractive opportunity for foreign investors looking to enter the Vietnamese renewables market.

Emerging Asia-focused investment firm InfraCo Asia has launched a sales process for its 33.4 percent stake in a 29.7MW run-of-river hydro plant in Vietnam.

The firm is looking for interested buyers for its stake in the Coc San Hydro Power Plant, which has been up and running since April 2016. With Capital Partners Group as its financial advisor, the firm has sent a teaser to a list of potential interested parties, including several domestic, regional and international infrastructure and renewables-focused funds and strategic players, Allard Nooy, chief executive of InfraCo Asia, told Infrastructure Investor.

The project has the all key permits and project agreements in place, including a 20-year power offtake agreement and a long-term project refinancing with a local lender, secured at the beginning of the operations period. Notably, the project’s investment certificate and land leases are in place for 50 years.

InfraCo Asia invested $7 million in the hydro project prior to it reaching financial close, Nooy said. He declined to disclose any target price for the divestment, but believes the asset would be attractive to investors looking to enter Vietnam’s renewables market with a long-term horizon. He said he looks forward to seeing indicative bids come in over the next six weeks, but pointed out the firm is not in a hurry to exit the project.

Nooy added InfraCo Asia remains committed to the Vietnamese market, thanks to its investment in a hybrid project combining 50MW of solar and 30MW of wind in Ninh Tay earlier this year. That should provide confidence to potential buyers seeking a pipeline of investable opportunities in the future. The Ninh Tay project is expected to reach financial close later this year and go online in 2019.