Japanese renewable energy firm Erex Co., Ltd. and local partner Sakura Green Energy JSC broke ground for a VND474.8 billion ($19.99 million) biomass fuel plant in northern Vietnam Thursday.
The plant, located in the mountainous province of Yen Bai, is named Erex Sakura Yen Bai.
The companies called the plant a celebration of the 50th anniversary of Vietnam-Japan relations. The three-hectare factory has a designed annual capacity of 150,000 tons of wood pellets and 305,000 tons of wood chip products a year.
The plant, the first of 14 Erex projects planned in Vietnam, is scheduled to begin operations in the third quarter of 2025.
The pellets can be used as fuel for thermal power plants, heating devices, food drying machines and other establishments. The plant seems to ensure biomass materials for an upcoming large-scale biomass power plant in the province that is said to be the first of its kind in Vietnam.
Speaking at Thursday’s groundbreaking ceremony, Hayashi Motoo, general secretary of the Japan-Vietnam Parliamentary Friendship Alliance, said the Japanese government considered the plant a key, advanced project for carbon decommission in Southeast Asia that would also boost biomass technology development in Vietnam.
Yen Bai is home to three Japanese-invested projects with a total registered capital of $100.3 million, Do Duc Duy, chief of the province’s Party Committee, noted at a meeting with Erex executives later the same day. He lauded the fast pace of Erex's project, with construction initiated just 11 months after the signing of a memorandum of the understanding.
Erex is researching three other projects in the province: a wood pellet factory; a biomass power plant; and one for collection of wood byproducts. These projects have a total estimated investment of $127 million, according to the provincial authorities.