Korea's Hanwha Energy divests from two solar power projects in Vietnam

Hanwha Energy Corporation Singapore Pte., Ltd - a member of South Korea’s Hanwha Group - in April-May 2023 lowered its ownership ratio in the KN Cam Lam and Cam Lam Solar power plant projects in the central province of Khanh Hoa from 70% to 19%.

At the same time, the Korean firm also withdrew from senior leadership positions in KN Cam Lam JSC and Cam Lam Solar JSC, the respective developers of these projects.

Specifically, Shin Byungchul stepped down from senior roles such as chairman and legal representative at both companies. Replacing him in these positions were Le Nu Thuy Duong - daughter of KN Holdings chairman Le Van Kiem, and his wife Tran Cam Nhung.

At the same time, a legal entity related to KN Holdings took a majority 51% stake in KN Cam Lam and Cam Lam Solar.

The above developments took place right after the Government Inspection chief issued inspection conclusions on April 28, 2023 on compliance with policies and laws in the management and implementation of power plant planning and construction according to the Power Development Plan VII and its amended version.

Per the conclusions, the Government Inspectorate pointed out many shortcomings and violations of the Ministry of Industry and Trade (MoIT) and Khanh Hoa province related to the KN Cam Lam solar power project.

It stated that the MoIT approved the addition of the 50-MW KN Cam Lam solar power project to Khanh Hoa province's electricity development planning for the 2016-2025 period, with a view to 2035. During the process, the MoIT's Electricity and Renewable Energy Authority, as a verification unit, did not fully absorb state utility Vietnam Electricity’s (EVN) opinions in Document No. 5237 dated November 7, 2017.

Accordingly, EVN recommended a comprehensive solution for solar power sources development planning in Khanh Hoa province to suit the needs and grid infrastructure, avoiding putting too much pressure on investment in power transmission systems and ensuring overall efficiency for society.

In addition, the provincial Department of Finance assessed equity only based on the investor's capital contribution commitment, but the provincial Department of Planning and Investment advised the provincial People's Committee to issue Decision No. 792 dated March 23, 2018 approving the investor KN Cam Lam Solar Power Company Limited (now KN Cam Lam JSC) to implement the project.

“It is not in accordance with Clause 3, Article 10 of the MoIT’s Circular No. 16/2017/TT-BCT dated September 12, 2017, and the People's Committee of Khanh Hoa province, relevant departments and agencies must be responsible for this wrongdoing,” inspectors said.

Regarding economic issues, the Government Inspector General requested the provincial People's Committee to review and handle state budget amounts totaling VND77.8 billion ($3.17 million) spent on site clearance for the Ta Ruc reservoir project.

After that, Khanh Hoa province recovered land for KN Cam Lam JSC and Cam Lam Solar JSC to lease land to implement the KN Cam Lam and the Cam Lam Solar power plant projects following approval by the Ministry of Finance in a document dated January 28, 2022.

Located in Cam An Bac commune, Cam Lam district, the two projects, with a total capacity of 100 MW and total investment capital of nearly VND2.3 trillion ($93.76 million), were officially put into operation on June 25, 2019 in time to enjoy the government's preferential feed-in-tariff (FiT) price of 9.35 U.S. cents per kWh.

In early 2019, Hanwha Energy Corporation Singapore Pte., Ltd purchased a 70% stake in both enterprises, while the shareholder group related to Le Van Kiem (including Kiem, Long Thanh Golf Investment and Trading JSC and Le Nu Thuy Duong) held on to the remaining 30%.

In mid-May 2019, one month before the projects entered commercial operation, Lee Jonghyeok became chairman and legal representative of the two companies.