The Asian Development Bank (ADB) and GreenYellow Smart Solutions Vietnam have signed a loan agreement of up to $13.8 million for rooftop photovoltaic (PV) solar systems to help increase the supply of clean and affordable energy for commercial and industrial consumers in Vietnam.
This is ADB’s first financing of a solar PV rooftop portfolio for the commercial and industrial segment in the Southeast Asian country.
The loan will support the development and operation of solar PV systems located on the rooftops of commercial and industrial businesses across the country. The financing package comprises a $3 million A loan from ADB’s ordinary capital resources and $10.8 million parallel loans from FMO, responsAbility Fund, and Société Générale, with ADB as mandated lead arranger.
A $3 million grant from the Climate Innovation and Development Fund (CIDF), administered by ADB, will also be provided. The grant will help crowd in an international commercial bank by addressing two critical hurdles in financing solar assets with a long economic life in Vietnam, namely the lack of long-term dong funding at a fixed interest rate and potential volatility of the VND/USD exchange rate.
“As Asia and the Pacific’s climate bank, ADB is increasingly focused on mobilizing private capital to finance renewable energy projects that the region urgently needs,” said ADB director general for private sector operations Suzanne Gaboury.
“Solar PV rooftop offers an efficient way for Vietnam to deploy substantial amounts of additional renewable energy capacity while providing reliable, low-cost energy to consumers, which helps to attract and retain business and enhance Vietnam’s global competitiveness,” she added.
Rooftop solar is an emerging form of renewable energy supply in Vietnam and its adoption in this sector has been hindered by a high upfront costs and limited financing channels.
With a planned total installed capacity of up to 32.3 megawatts at its peak, this project is set to increase clean energy supply to the sector by at least 31.5 gigawatt-hours annually, reducing 15,530 tons of carbon dioxide emissions by 2025.
“Embedded within our core business is a profound commitment to development impact, and our collaboration with ADB uniquely aligns with our corporate mission toward innovative power distribution and driving energy transition," said GreenYellow Vietnam chief executive officer Sebastien Prioux. “ADB’s instrumental role in fostering connections among like-minded partners is integral to our collective journey in actively advancing sustainable development.”
CIDF is a blended finance facility managed by ADB, established in September 2021 with an initial $25 million philanthropic commitment from Bloomberg Philanthropies and Goldman Sachs. The fund has the potential to unlock up to $500 million in private sector and government investments to support sustainable low-carbon economic development.
Established in 2007, GreenYellow is a French energy transition partner, specializing in decentralized solar photovoltaic production, and energy efficiency, storage and monitoring services. It currently operates in 16 countries across Asia, Africa, Europe, and South America, and entered Viet Nam in 2019.
GreenYellow is responsible for the development, funding and operation of infrastructure projects, enabling its clients to produce local and competitive green power, reduce their energy consumption and fast-track their decarbonization.