HSBC loans Malaysia’s Leader Energy $23.3 mln for Vietnam renewable energy portfolio

HSBC Vietnam and Malaysia’s Leader Energy Holding Berhad (Leader Energy) have signed a VND593 billion ($23.33 million) financing agreement for the development of solar projects in the country.

This transaction marks the bank's second transaction for Leader Energy in Vietnam, following one for a hydropower plant in 2017, HSBC Vietnam said in a Monday release.

The new seven-year loan to the wholly owned subsidiary of HNG Capital will be used to support refinancing of the Vinh Hao 6 (VH6), a 50MW solar power plant recently acquired by Leader Energy.

Located in the southcentral province of Binh Thuan, the project began commercial operations in 2019, generating 100% of its revenue from the sale of electricity to state utility Vietnam Electricity (EVN) at the feed-in-tariff (FiT) of 9.35 U.S. cents/kWh under a 20-year power purchase agreement (PPA).

The project generates 83,000 MWh electricity thereby offsetting 75,131 tons of carbon dioxide emissions a year.

VH6 was fully acquired by Leader Energy in 2023. The company said the acquisition was part of Leader Energy’s plan to own 500 MW-plus of renewable energy assets in Vietnam.

The deal showcased the renewable energy potential of Vietnam given conducive conditions and the government's pledge to achieve net zero emissions by 2050, the bank said.

Following this commitment made at COP26, Vietnam has sought to double down on energy transition as the sector accounts for more than half of the nation’s greenhouse gas emissions. Besides, the country's natural resources present significant potential to attract more investment into the growing renewable energy sector, officials have said.

“Contributing to the energy transition is a key component of Leader Energy’s strategy to mitigate climate change and promote sustainable development. The group is expanding its renewable energy portfolio to fulfil its contribution to Vietnam achieving net zero greenhouse gas emissions by 2050,” said Jenny Ng, CFO of Leader Energy.

Ahmed Yeganeh, country head of wholesale banking, HSBC Vietnam said: “This deal demonstrates how the financial sector can play an active role in unlocking the renewable energy potential for Vietnam while supporting the sustainable growth ambition of businesses."