The Asian Development Bank (ADB) signed a loan agreement on Monday for US$13.8 million to GreenYellow Smart Solutions Vietnam Co. Ltd., or GreenYellow, to develop rooftop photovoltaic (PV) solar power systems in Vietnam.
The deal is expected to help increase the supply of clean and affordable energy to 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.
Rooftop solar energy is an emerging form of renewable energy supply in Vietnam, but its adoption in this sector has been hindered by high upfront costs and limited financing channels, according to ADB.
With a planned total installed capacity of up to 32.3 megawatts at its peak, the 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.
The loan will shore up GreenYellow’s growth strategy in Vietnam through its development and operation of rooftop solar systems at commercial and industrial enterprises nationwide.
The financing package comprises a $3 million loan from ADB’s ordinary capital resources and a $10.8 million parallel loan from FMO, a climate fund managed by responsAbility Investments AG and Societe Generale, with ADB as the mandated lead arranger.
A $3 million grant from the Climate Innovation and Development Fund, administered by ADB, will also be provided.
Rooftop solar power offers an efficient way for Vietnam to deploy substantial amounts of additional renewable energy capacity, while providing reliable, low-cost energy for consumers, which helps attract and retain business activities, as well as enhance Vietnam’s global competitiveness, said Suzanne Gaboury, ADB director general for private sector operations.