International Finance Corporation, the private lending arm of the World Bank, is partnering a Singapore-based private equity firm to invest in Gia Lai Electricity JSC (GEC), one of Vietnam’s largest private-sector independent small hydroelectric power producers.
IFC together with a private equity fund based in Singapore proposes to invest up to 36% equity stake in GEC, according to its investment disclosure. The investment is meant to support GEC’s renewable energy development plans in Vietnam.
The quantum of investment as also the name of the PE investor were undisclosed.
GEC is 87% controlled by Thanh Thanh Cong Group (TTC), a Vietnamese conglomerate founded by Mr Dang Van Thanh in 1979. TTC is Vietnam’s largest private sugar manufacturer. It also has 79 MW biomass power plant portfolio owned by its various sugar business units.
Mr. Thanh was also the founder and chairman for 20 years of Sacombank, one of the largest commercial banks in Vietnam.
TTC has identified its next growth opportunity in renewable energy, and set a medium-term strategy to grow GEC into a leading renewable energy business in Vietnam. GEC is thus also considering wind and solar projects in addition to hydel power plants, the filing said.
Founded in 1989, GEC owns and operates 15 existing hydro power projects totaling 84 MW in installed capacity. Majority of its portfolio comprises small hydro power projects (HPPs), ranging from 0.3MW to 16MW.
GEC’s business model consists of the development and acquisition of small HPPs, wind and solar projects. While GEC’s ownership varies from project to project, it assumes an active role in design, construction, and operation depending on the project stage.
GEC is located in Gia Lai province, in the Central Highlands of Vietnam. Many of GEC’s existing small hydro power projects are located in the same province. GEC also has several projects located in different provinces of Vietnam, mainly in the central area of Vietnam.
IFC has been quite active in investing, both debt and equity, in Vietnam as also the East Asian region. Some of its recent proposed investments include a $20-million commitment in Canadian Solar for its Vietnam foray and an acquisition financing loan for Golden Towers in the telecom space.