Vietnam’s Thanh Thanh Cong Investment JSC (TTC) and its subsidiary Gia Lai Electricity JSC (GEC), closed Thursday a strategic partnership with two foreign partners, which will promote renewable energy in the Southeast Asian country.

Under the partnership, International Financial Company (IFC) and Armstrong S.E. Clean Energy Fund (Armstrong) will hold a 16 percent and 20 percent stake, respectively, in GEC, a leading hydropower developer in central Vietnam.

This marks IFC and Armstrong’s first-ever investments within Vietnam’s energy sector.

IFC is a member of the World Bank Group, whereas Armstrong is a dedicated renewable energy private equity fund based in Singapore.

The two foreign partners will also help GEC expand its hydropower portfolio and investment in other renewable energy segments such as wind and solar power.

GEC is one of the largest private sector hydropower players in Vietnam with 84.4 MW of installed capacity across 15 small-scale run-of-the-river hydropower plants.

“Support by IFC and Armstrong as shareholders will not only enable us to expand our core business in hydropower but also help us become a leading renewable energy company and provide sustainable alternatives to fossil fuel-based power generation in Vietnam,” GEC CEO Le An Khang said.

“Their investment is a vote of confidence in Vietnam’s hydropower sector potential and should help attract more international investors.”

Vietnam’s electricity consumption has outpaced the country’s economic growth rate, doubling Vietnam’s gross domestic product growth rate over the past few years. GEC’s renewable energy developments will help the government reach its target of increasing power capacity by 14 percent annually between 2015 and 2030.

“We believe GEC is well positioned to capture the strong growth potential in Vietnam’s renewable energy sector,” Andrew Affleck, Armstrong managing partner, said.

“Armstrong’s aim is to share the knowledge and experience we have gained from developing and constructing multiple renewable projects in neighboring Southeast Asian markets to help GEC to continue to build a leading position in Vietnam.”

By developing sustainable hydropower and other renewable energy sources, GEC will help the country to meet its estimated ten percent annual increase in power demand, diversifying its energy mix and reducing its reliance on imported fossil fuels.

“We believe IFC’s investment is an important step to encourage other investors to tap into the rich potential of Vietnam’s green energy sector, where participation by foreign investors is still modest,” said Hyun-Chan Cho, IFC head for infrastructure and natural resources for Asia Pacific.

“IFC’s global industry knowledge will help transform GEC into a role model for other emerging renewable energy players in Vietnam by showcasing industry best practices, while at the same time expanding supply of reliable and clean energy.”

Hydroelectricity is the world’s largest source of renewable energy and accounts for one-fifth of the world’s electricity supply from all sources.

Over the last decade, IFC has invested more than $1 billion in 75 hydropower projects in 25 countries across the world to promote hydropower’s responsible and sustainable development in developing countries.

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