Bamboo Capital energy arm aims to spearhead clean energy, support sustainable development in Vietnam

Vietnamese private conglomerate Bamboo Capital says its response to climate change challenges is to have its energy arm BCG Energy pioneer the clean energy trend and contribute to the nation’s sustainable growth.

It says that the severe impacts the world has been experiencing, from rising sea levels and saltwater intrusion to increasingly extreme weather events with dire consequences, underscore the urgency of applying renewable energy as mitigating solution.

Recognizing the urgency as well as the potential of the renewable energy sector, Bamboo Capital has pioneered investments in this field.

To make its investment strategy effective, Bamboo Capital has decided on not having scattered investments or engagement in "hot" development. Instead, it will create a closed ecosystem consisting of business sectors in which the group has strength and experience.

These sectors include renewable energy, real estate, construction and infrastructure, financial services and insurance, and manufacturing and pharmaceuticals.

Among the core sectors, Bamboo Capital views renewable energy as a strategic pillar and has been investing heavily in the sector through BCG Energy.

The subsidiary will not only invest in and operate solar, wind and waste-to-energy projects, but also explore other forms of renewable energy.

Renewable energy vision

The significant strides that BCG Energy has made in recent years ranks it among the top three largest renewable energy companies in Vietnam.

Some of its successful projects include the 40.6 MW BCG Long An 1 and 100.5 MW BCG Long An 2 solar power plants in Long An province; and 49.3 MW BCG Vinh Long in Vinh Long province, all operational.

Notably, the 330 MW Phu My plant in Ba Ria-Vung Tau province is BCG Energy’s largest solar facility, generating around 520 million kWh per year, meeting the consumption of approximately 200,000 households while helping to reduce CO2 emissions by hundreds of thousands of tons annually.

In addition, BCG Energy is also developing rooftop solar projects at industrial parks and residential areas, providing clean and cost-saving energy to households and businesses.

At the same time, the company is intensifying its investment in other renewable energy projects, including wind power projects in Ca Mau, Soc Trang, and Tra Vinh provinces, with a projected capacity of 550 MW upon completion.

In Q3/2024, the company marked a milestone by officially launching the Tam Sinh Nghia waste-to-energy plant in Ho Chi Minh City.

This project, with an initial investment of VND6.4 trillion ($252.5 million), is expected to be operational by the end of 2025 and have a waste-to-energy capacity ranging from 2,000 to 2,600 tons per day, equivalent to an electricity generation capacity of 60 MW.

The plant is designed to generate 365 million kWh annually, meeting the electricity needs of about 100,000 households and reducing CO2 emissions by approximately 257,000 tons per year.

Net Zero opportunities

BCG Energy has placed itself to take advantage of Vietnam’s strong commitment to sustainable development goals, particularly its pledge of net-zero emissions by 2050 made at at the 26th UN Climate Change Conference (COP26) in the UK in late 2021.

To realize this goal, the government has introduced numerous incentives to encourage renewable energy investments, allowing BCG Energy to effectively leverage policies like exemptions or reductions of corporate income tax and import taxes on renewable energy equipment, as also incentives in land use rights.

In addition to financial incentives, the company has also tapped opportunities created by the Vietnamese government’s focus on improving technical infrastructure to support renewable energy projects like solar and wind power to integrate them into the national grid.

These include Decree 80 on direct power purchase agreements (DPPA) between renewable energy producers and major consumers; and Decree 135, which promotes the development of rooftop solar power for self-production and self-use.

Turning opportunities into results

By effectively utilizing the government’s incentives and operating energy plants efficiently, BCG Energy recorded revenues of over VND689 billion and after-tax profits of VND290 billion in the first half of 2024, achieving 59% of its annual profit target.

Compared to the same period in 2023, its revenue and net profit grew nearly 22% and 33 times, respectively.

This success was made possible by a 30% year-on-year increase in electricity production, reaching 416.5 million kWh, thanks to the second phase of the Phu My solar power plant beginning commercial operations in June 2023.

Its solar and rooftop solar plants also reported high performance, playing a crucial role in the company's rapid growth.

Another significant milestone in its growth has been BCG Energy officially registering on the Unlisted Public Companies Market (UPCoM) as BGE.

With a charter capital of VND7.3 trillion ($288 million), equivalent to 730 million shares, this listing has not only helped the company raise additional funds for expanding renewable energy projects but also affirmed its transparency and potential for sustainable development.

It has enhanced the company’s market position and attracted interest from domestic and international investors.

Overall, it has created favorable conditions for the company to access more capital sources and execute its long-term expansion strategy.

Senior executives say BCG Energy has proved to be a strategic trump card in realizing Bamboo Capital’s renewable energy vision of becoming a national leader in this field.

BCG and BGE shares closed Friday at VND6,330 ($0.25) and VND11,500 ($0.45) apiece.