Mitsubishi Corporation said on Monday that the Japanese heavyweight and other shareholders of the Monsoon wind power project in Laos have raised $692 million in financing for the wind farm, which will serve Vietnam and other parts of Southeast Asia.
Comprising 133 wind turbines, the project in Sekong and Attapeu provinces in southern Laos will form the largest wind power plant in Southeast Asia and the first in Laos. Asian Development Bank (ADB) and Monsoon Wind Power Co. Ltd. (Monsoon) signed a $692.55 million non-recourse project financing package this March to build the 600-megawatt wind farm to sell power to Vietnam.
Once the wind farm has been constructed, it will sell electricity to Vietnam’s state-run utility giant Electricity Vietnam under a 25-year power purchase agreement, Mitsubishi said, adding that the Japanese firm, Thai renewable energy firm BCPG Pcl, and other stakeholders secured the financing package from ADB, Japan International Cooperation Agency (JICA), Sumitomo Mitsui Banking Corporation, and other lenders.
The project should be launched in 2025. Its total cost is $950 million, according to Monsoon's website. Meanwhile, according to documents BCPG Pcl had earlier shown to its investors, the project’s second phase is expected to raise the capacity to 1,000 megawatts.
The first cross-border renewable energy project in Southeast Asia is set to play a central role in a plan shared by the governments of Vietnam and Laos to transmit 5,000 MW of electricity from Laos to Vietnam by 2030, Mitsubishi said.
In plans for the development of energy in ASEAN, electricity generated in Laos would also be exported to other regional countries like Cambodia, Thailand, and Singapore.
Mitsubishi is involved in the renewable project via investment through its wholly-owned subsidiary Diamond Generating Asia Ltd. Other partners, the Japanese heavyweight said, are ACEN Renewables International of the Philippines’ Ayala Group, three Thai firms namely Impact Electron Siam Co., STP&I Pcl, BCPG Pcl, together with SMP Consultation, a Laotian consulting firm.
ADB said in its release for this March’s signing of the project financing package with Monsoon that cross-border power supply has been a pillar of Laos’ economic growth.
“Harnessing the country’s untapped wind resources can provide energy diversification as the seasonality of the wind resource is countercyclical to the rainy season, which supports the country’s hydropower generation.
“The project will reduce annual greenhouse gas emissions by at least 748,867 tons of carbon dioxide equivalent,” ADB said.