Ayala formalizes entry into Vietnam with launch of solar power plant

By Victor V. Saulon
Sub-Editor

VIETNAM — Ayala-led AC Energy, Inc. launched on Saturday a 330-megawatt (MW) solar power plant in Vietnam in partnership with a local company, marking its maiden project in the regional neighbor that seeks to build its renewable energy capacity by offering favorable power rates to investors.

“AC Energy has an aggressive long-term aspiration to building meaningful portfolio in renewable energy and has identified Vietnam as one of its priority projects,” Fernando Zobel de Ayala, president and chief operating officer of Ayala Corp., said during the inauguration in Ninh Thuan province.

The launch of the $294-million project comes ahead of the June 2019 deadline for solar energy investors to avail of a feed-in tariff of 9.35 US cents for 20 years. Vietnam has yet to issue regulation on whether the scheme will be extended.

“The team’s been looking at where the opportunities are and it’s really about the position of the different governments in the region and what we’re finding is that different governments, Vietnam in particular, have been very aggressive in terms of attracting investment for solar and wind,” Mr. Zobel told reporters during the event.

Ayala Corp. unit AC Energy teamed up with Vietnam’s BIM Group for the project, which started in January 2018. The partners took 14 months and employed around 2,000 workers throughout the construction phase. Rizal Commercial Banking Corp. was the sole lender and provided a non-recourse project financing of $232 million.

“We would like to focus on renewables, both solar and wind. And for now, the policy of the government is to support solar and wind with feed-in tariff so therefore we will invest behind the feed-in tariff program of the government, at least until 2021 where the government has given a feed-in-tariff for wind,” Eric T. Francia, AC Energy president and chief executive officer, told reporters.

The solar farm is the first project under BIM\AC Renewables, the renewable energy development platform of AC Energy and the BIM Group. It sits on more than 300 hectares of land. The power plant is made up of three facilities with installed capacities of 30 MW, 250 MW, and 50 MW, respectively.

The project, which is equipped with the latest technology to ensure efficient operations, is expected to generate 545 million kilowatt-hours of renewable energy yearly and generate income and jobs for the province of Ninh Thuan.

Doan Quoc Huy, BIM Group chief executive officer and vice-chairman, described the project as “very challenging” for the company. His family is into the production of salt, and in real estate.

“We had a very short timeline and the project size was the biggest ever in Vietnam or even in Southeast Asia,” he told reporters.

“It was a pioneering industry and to do that we needed a partner who had a problem-solving mindset, who could approach this single problem with us in trying to find solutions in mind, and AC Energy was great. We couldn’t have asked for more in a partner,” he added.

The commissioning of the solar farm marks a milestone in AC Energy’s regional expansion as it aims to reach its target of 5 gigawatts of renewable energy capacity by 2025, with renewables accounting for at least 50% of total energy output.

“We’re discussing further projects in Vietnam in the energy sector with AC Energy right now in the renewable space,” Mr. Huy said, adding that his group had been “very happy” with the partnership with the Ayala company.

“We’re looking at wind right now. We’re still discussing it. It’s a range right now because we have a couple of constraints that we need to work with. It’s still going to be in the Ninh Thuan area, actually on the same site,” he added.

Mr. Francia said the BIM Group has an aspiration of building 1,000 MW on the site where the solar farm was built.

“We’ve done the first 330 [MW] with them. We’re hopeful that we can partner with them to get to that 1,000 [MW] and they also announced over 300 MW of wind as part of that 1,000 [MW]. So while we don’t have any firm agreement, of course, being good partners we’ll be discussing to what extent we can continue our collaboration,” he said.

Mr. Zobel said doing business in Vietnam was made easier by having a local partner.

“There’s no way that a foreign group, I think, could come into an area like this and tackle the kind of challenges that you have and that you face without a local partner,” he said.