The Asian Development Bank (ADB) has recently approved $160.5 million to refinance the 240 megawatts (MW) Dau Tieng 2 Tay Ninh solar power project in Vietnam, media reports stated. The financing structure includes $24.5 million from ADB, $128 million from the syndicated loan (B loan) and $8 million from Leading Asia’s Private Infrastructure Fund (LEAP).
Dau Tieng is considered the largest solar project of its kind in Southeast Asia. It produced 688 kWh each year and met the power needs of 320,000 homes approximately. The Dau Tieng 2 is part of the 420MW Dau Tieng solar complex built at a total cost of $393 million.
Thailand-based Grimm Group, a multinational conglomerate and Xuan Cau, Vietnam’s construction company, developed the Dau Tieng solar project. In 2019, the commercial operation of Dau Tieng 1 and Dau Tieng 2 began. Dau Tieng 3 plant with a capacity to produce 150MW is expected to be completed by 2025.
Johan Yeap, an infrastructure expert at Pinsent Masons, told the media that the approval by ADB of this project is a sequel to the International Finance Corporation (IFC) approving its financing of two onshore wind projects in Vietnam.
He said, “It is a positive endorsement on the financial ability of the Vietnamese onshore renewables contractual framework. With Vietnam pivoting away from coal, onshore renewables will play an increasingly important role, which may reinforce the confidence in and the viability of these projects.”
As the installed capacity of the intermittent generation increases, investments into grid upgrades are also required to unleash the full potential for such projects. Thus, the potential from offshore renewables is highly likely to affect the scale and potential of the onshore renewables.