UOBVM, Orix in $50m Vietnam hydro deal

The Singapore buyout firm made its investment through its third vehicle, which invests in growth-oriented companies in East and Southeast Asia

UOB Venture Management (UOBVM), a private equity investment firm owned by Singapore’s United Overseas Bank, has teamed up with Japanese financial group Orix Corporation to invest $50 million in a hydropower company in Vietnam. 

Bitexco Power Corporation, one of Vietnam’s largest privately owned hydropower companies, owns and operates 18 plants in the country with a gross power capacity of nearly 1GW. The company plans to use the new capital for business expansion and consolidate its market position in the renewable energy sector, according to a joint statement. 

The UOBVM made its investment through the ASEAN China Investment Fund III, which invests in growth-oriented companies in East and Southeast Asia. Singapore-based UOBVM manages about S$1 billion ($734 million; €658 million) in assets. UOBVM and Orix are investing $25 million each.

“Hydropower is one of the most cost-efficient sources of electricity generation, and we believe Vietnam’s growth will continue to drive the demand for renewable energy,” said Seah Kian Wee, managing director of UOBVM. 

The Vietnamese government estimates that electricity demand will expand at annual growth rates of 10-12 percent, rising from 169.8TWh in 2015 to 615.2TWh by 2030. It has liberalised the power sector and introduced market pricing to attract private investment. 

The deal also marks the first investment by the Japanese group in Vietnam’s power sector. “We believe Bitexco Power is in the best position to benefit from the country’s ongoing reform of the electricity market, underpinned by the rising demand for electricity. Follow this investment, we are pleased to announce our further business expansion in the renewable energy sector across Asia,” said Yuichi Nishigori, corporate executive vice president of Orix.   

Orix has also teamed up with India’s IL&FS to develop 1GW of wind energy capacity in India, and owns and operates renewable energy projects in Japan.