AIIB bank eyes financing wind power projects in Vietnam's Central Highlands

The Asian Infrastructure Investment Bank (AIIB) is considering financing two wind power projects in Vietnam’s Central Highlands with loans worth $160 million.

The Dak Lak and Gia Lai wind power projects cost a total $345.8 million and $60 million, respectively, according to the China-headquartered bank’s documents issued in May.

The 200 megawatt Dak Lak project features four 50-MW wind farms. The project cost includes $115.8 million in equity and $230 million in loans, of which $100 million will likely come from AIIB and $130 million from commercial banks.

The AIIB is expected to provide its final review decision in Q3/2023 and financing approval in Q4/2023. Beijing-headquartered China Huadian Engineering Co., Ltd., an electrical/electronic manufacturing company, is both the guarantor and sponsor of the project.

The 99-MW Gia Lai project features 30 turbines of 3.3 MW each. The project costs $60 million which will likely be financed by AIIB. The AIIB is scheduled to give its appraisal decision in Q2/2023 and then financial approval in Q3/2023. Hong Kong-based China Power International Development Limited is the sponsor of the project.

Founded in 2016, the AIIB is a multilateral development bank with an objective of pushing sustainable economic growth and connecting the infrastructure in Asia. Its first project in Vietnam was a loan of $100 million to VPBank in 2020 to aid private businesses under impacts of the Covid-19 pandemic. Its second loan in Vietnam was $47.5 million in an A/B loan of $95 million for the 125-MW Dakdrinh hydropower project in Kon Tum and Quang Ngai provinces.

The AIIB is also preparing to provide up to $90 million toward the Xekaman cross-border hydropower projects in Laos, whose power output is purchased by state utility Vietnam Electricity. The move aims to eliminate the sovereign support through Vietnam Development Bank (VDB) and sovereign guarantee from the Vietnamese government by mobilizing private capital.