Sembcorp to develop up to 1.5GW of renewable energy projects in Vietnam

SEMBCORP Utilities, a wholly-owned subsidiary of Sembcorp Industries U96 : U96 0%, has signed a collaboration agreement with BCG Energy, a wholly-owned subsidiary of Vietnam's Bamboo Capital Group, to develop renewable energy projects in Vietnam.

Under the collaboration, the companies will "leverage each other's strengths and resources" to jointly develop up to 1.5 gigawatts (GW) of wind and solar projects in Vietnam, Sembcorp said in a bourse filing on Thursday (Dec 9).

The first phase will involve an initial funding of US$30 million to develop a 550 megawatt portfolio of utility-scale nearshore and onshore wind assets in the Ca Mau, Tra Vinh and Soc Trang provinces. BCG Energy has secured the projects, which are expected to come online by the end of 2022.

Sembcorp's chief executive officer (CEO) of Singapore and South-east Asia Koh Chiap Khiong said Vietnam is a "key growth market" for Sembcorp in the region.

The company said it is looking to scale up its renewables portfolio in the country, after it had invested in Vietnam for more than 20 years through its integrated energy and urban management expertise.

Pham Minh Tuan, vice-chairman of Bamboo Capital and CEO of BCG Energy, noted that the Vietnamese government has prioritised renewable energy sources in the latest draft of its eighth national power development plan.

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He said: "The partnership between BCG Energy and Sembcorp not only brings economic benefits to both companies, but also promotes the clean energy transition in Vietnam, contributing to Vietnam's emission reduction goals in the future."

Sembcorp does not expect the signing of the agreement to have a material impact on its earnings per share and net asset value per share for the financial year ending Dec 31, 2021.

BCG Energy is the holding company for renewable energy assets under Bamboo Capital, and focuses on development and operation of ground-mounted and rooftop solar assets in Vietnam. It also intends to diversify its portfolio into floating solar, wind power and liquefied natural gas projects in the future.

Shares of Sembcorp closed at S$2.00 on Thursday, up by S$0.01 or 0.50 per cent.

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