HSBC finances Malaysian company's newly acquired solar project Vinh Hao 6 in Vietnam

HSBC Vietnam and Malaysian Leader Energy Holding Berhad (Leader Energy), a wholly owned subsidiary of HNG Capital,  have signed a VND593 billion ($24 million) financing deal to support the development of Leader Energy's solar projects in Vietnam.

This agreement marks the Bank's second transaction for Leader Energy in the country, following a financing of a hydropower plant in 2017.

HSBC acted as the sole lender of the seven-year committed term loan for Leader Energy. The loan will be used to support the refinancing of Vinh Hao 6 (VH6), a 50MW solar power plant newly acquired by Leader Energy.

Located in south central Binh Thuan province, the project entered into commercial operation in 2019, generating 100 per cent of its revenue from the sale of electricity to Vietnam Electricity (EVN) at the Feed-in-Tariff (FiT) of 9.35 USD cent per kwh under 20-year Power Purchase Agreement (PPA). The project generates 83,000MWh electricity thereby offsetting 75,131 tons of carbon dioxide emissions (CO2) a year.

VH6 has been fully acquired by Leader Energy since 2023. The acquisition reaffirms Leader Energy’s commitment of 500MW+ of renewable energy assets in Vietnam.

The deal also showcases the renewable energy potential of Vietnam given the country's conducive conditions and its Government's pledge to achieve net zero by 2050. Following this commitment made at COP26, Vietnam aims to double down on energy transition as the sector accounts for more than half of its greenhouse gas emissions.

Furthermore, the country's natural resources offer potential to attract more investments into the growing renewable energy sector.

“We are pleased with the successful refinancing of our Vinh Hao 6 in Binh Thuan province," said Ms. Jenny Ng, Group Chief Financial Officer, Leader Energy. "The refinancing arrangement, secured through HSBC Vietnam with close collaboration with HSBC Malaysia has offered more favorable term. This strategic financial decision demonstrates our solid financial footing, commitment in maintaining a strong financial foundation and our focus on sustainable growth. The confidence shown by our financial partners is a testament to the robustness of our financial management, the underlying asset and our ability to deliver."

Ms. Jenny Ng also affirmed that contributing to the energy transition is a key component of Leader Energy’s strategy to mitigate negative impacts from climate change and promote sustainable development. "The Group is expanding its renewable energy portfolio to fulfil its commitment to achieving net zero greenhouse gas emissions by 2050," she added.

"We are proud to continue supporting Leader Energy in its efforts to decarbonize Vietnam's energy sector," Mr. Ahmed Yeganeh, Country Head of Wholesale Banking, HSBC Vietnam, said. "Our relationship with Leader Energy spans over 45 years and we have supported their growth and expansion, including their transition towards the renewable energy sector in multiple countries in ASEAN and in Taiwan. This deal demonstrates how the financial sector can play an active role in unlocking the renewable energy potential for Vietnam while supporting the sustainable growth ambition of businesses".

The success of this transaction highlights HSBC's strong ASEAN connectivity, offering a seamless banking experience through a close collaboration between HSBC Vietnam and HSBC Malaysia.