Singapore-based Armstrong Asset Management has agreed to sell a 39.4MW Vietnamese wind farm to Philippine energy firm AboitizPower for approximately $46 million, the latter said in a statement.
AboitizPower International, a subsidiary of AboitizPower, will acquire Mekong Wind, which owns a 99.9 percent stake in Dam Nai Wind Power, the owner and operator of the Dam Nai onshore wind farm, located in Vietnam’s southern Ninh Thuan province, which started commercial operations in late 2017.
The deal is expected to reach financial close during the last quarter of this year and the final transaction value might be subject “to certain closing adjustments”, AboitizPower said in its statement without providing more details.
The deal is the power company’s first investment in Vietnam and, according to the statement, AboitizPower will continue looking for opportunities in the renewables space in the country and across South-East Asia.
The Dam Nai wind farm is backed by a 20-year PPA with EVN, Vietnam’s sole power distribution company, Andrew Affleck, managing partner at Armstrong Asset Management, told Infrastructure Investor.
Both AboitizPower and Armstrong declined to comment on whether Mekong Wind held any other assets.
Affleck revealed that the Bank for Investment and Development of Vietnam sponsored the project through a $45 million loan. “This was the first time limited-recourse debt had been provided for a wind project in Vietnam,” he said.
The project had to be developed taking into account Vietnam’s six-month high wind season, Affleck explained. “Planning and executing construction before the windy season was a challenge, but it was well-managed by the multiple parties involved, including K2 [a renewables advisory and project management firm] that helped manage [the process],” he added.
Affleck argued that Vietnam has become an attractive market for renewables developers and investors, due to its considerable wind, solar, and water resources; its policymakers aiming to address energy needs; and an attractive tariff system.
Armstrong is involved in the development of other wind projects in the country through its investment in Gia Lai Electricity, Affleck said. In 2016, Armstrong and IFC jointly invested in Vietnam’s Gia Lai, a hydropower developer with 84.4MW of installed capacity, according to a statement.
The asset belonged to Armstrong’s Southeast Asia Clean Energy Fund, a vehicle closed in 2014 on $164 million. Investors in the fund included the European Investment Bank, the World Bank’s International Finance Corporation, Germany’s DEG, Switzerland’s Obviam and The Netherlands Development Finance Corporation, according to Infrastructure Investor data.