04/12/2020 09:35:41 (GMT +7)
 
 

M&A renewables on upward trajectory in Vietnam

Đổi trò chơiMergers and acquisitions in renewable energy in Vietnam are on an upward trajectory and expected to become even hotter next year, with the country officially overtaking Thailand to rank as the largest solar market in Southeast Asia.

M&A renewables on upward trajectory in Vietnam

Đổi trò chơiWith more than 6,314MW installed as of the end of August, the market is expected to add 7,000MW newly-approved capacity while 13,000MW also awaits approval.

The new landscape has fuelled investor sentiment as they begin to assess risks from other perspectives instead of only focusing on models such as power purchase agreements due to bankability issues.

As a result, mergers and acquisitions (M&A) in the country’s renewables, especially in solar, have become more active since the end of 2018 thanks to a feed-in tariff (FiT) mechanism of 9.35 US cents for solar for phase 1, and each kilowatt-hour generated from ground-mounted, floating, and rooftop solar initiatives set at 7.09, 7.69, and 8.38 US cents respectively for the FiT2 rate.

M&A renewables on upward trajectory in Vietnam
M&A renewables on upward trajectory in Vietnam.

Under Decision No.13/2020/QD-TTg issued in April on encouraging mechanisms for solar power development in Vietnam, the deadline of December 31 was set for solar systems of any scale to attain a certificate of delivery and enjoy the FiT2 rate, which is considered financially attractive. Both developers and investors believe that acquisitions of operational plants may be far easier from a legal point of view, while also reducing the risk of forecasting generation as real data already exists, while they do not know if new projects can enjoy the preferential FiT rates.

Moritz Sticher, senior advisor for Berlin-based cleantech advisory Apricum, said that the solar M&A landscape is looking up for several reasons. By the end of 2020, nearly 3,000MW of ground-mounted solar projects could potentially reach commercial operation date, adding to existing operational solar assets – many of which will be up for acquisition.

 

Đổi trò chơiFrom FiT phase 1, additional ground-mounted projects are up for acquisition as well as rooftop solar projects that have been developed under both rate phases. This expected market supply of operational solar power plant assets, Sticher said, plus the number of ongoing transactions not yet finalised, is likely to create more traction for the solar M&A scene of Vietnam, driven by a rather oversupplied capital market looking for renewable energy assets.

Rong Viet Securities Corporation meanwhile added that M&A activities in renewable projects in Vietnam also contributed through high demand of electricity and attractive electricity tariffs in the country.

Đổi trò chơi“Compared to other solar projects in some regions and potential future tariffs in Vietnam announced under competitive selection processes, the tariffs awarded under both FiT phases are high, allowing for relatively high returns,” explained a Rong Viet analyst at last week’s Vietnam M&A Forum 2020 in Ho Chi Minh City – an event that attracted more than 700 people.

At the forum, however, experts pointed out existing barriers for M&A activities including continuing COVID-19 pandemic setbacks globally, regulatory uncertainty, financing access, and environmental and social concerns.  VIR

Nguyen Thu

Legal clear-up may assist M&A boom

Legal clear-up may assist M&A boom

Đổi trò chơiMergers and acquisitions are expected to receive a push in the months to come on the back of new rules on separation and merger of projects, taking effect from early 2021.

Vietnam’s renewable energy: Key guidance to investors

Vietnam’s renewable energy: Key guidance to investors

Solar power capacity is increasing thanks to significant changes in feed-in-tariff.

 
 

Other News

.
Pandemic drags down FDI attraction
BUSINESSicon  22 giờ trước 

Đổi trò chơiVietnam had attracted a total of 26.43 billion USD in FDI this year as of November 20, equal to 83.1 percent of the figure in the same period last year, according to a recent report from the Ministry of Planning and Investment.

Confidence offered with EVFTA implementation
BUSINESSicon  23 giờ trước 

The EU-Vietnam Free Trade Agreement, which entered into force on August 1, is expected to help heat up mergers and acquisitions in Vietnam’s retail market.

Forestry sector reports unprecedented export turnover of $13 billion
BUSINESSicon  23 giờ trước 

Despite Covid-19, the forestry obtained total export turnover of $13 billion worth of timber and wooden exports this year.

Annual textile and garment exports down for first time in 25 years
BUSINESSicon  02/12/2020 

The total export value of the textile and garment industry is forecast to reach about US$33.5-34 billion this year, a year-on-year decrease of 14-15 per cent, but higher than the forecast of $30-31 billion in April.

VIETNAM BUSINESS NEWS HEADLINES DECEMBER 2
BUSINESSicon  02/12/2020 

Tra fish exporters should remain calm amid China’s control of imported frozen food

Freight and logistics stocks on the rise despite pandemic
BUSINESSicon  02/12/2020 

Freight and logistics stocks have seen major gains since the beginning of 2020 even as the COVID-19 pandemic has wreaked havoc on the economy.

VN sugar industry calls for fair competition
BUSINESSicon  02/12/2020 

Đổi trò chơiThe sugar industry is facing many challenges and unfair competition from imported and smuggled goods, experts told a conference held in Hanoi on December 1.

VND4 trillion tower: no buyer after 10 years
BUSINESSicon  02/12/2020 

Many buildings up for sale cannot find buyers.

ASEAN customs transit system launched
BUSINESSicon  02/12/2020 

The online ASEAN Customs Transit System (ACTS) was officially launched on November 30 to accelerate trade in goods by road within Southeast Asia.

Tax hike worries ride-hailing drivers, but their companies actually pay the tax
BUSINESSicon  02/12/2020 

Under a new regulation, from December 5, ride-hailing services will be taxed 10 percent instead of the current 3 percent.

China-ASEAN Expo opens, featuring digital economy, RCEP
BUSINESSicon  22 giờ trước 

The 17th China-ASEAN Expo and China-ASEAN Business and Investment Summit kicked off on Friday, highlighting booming digital economy cooperation and the implementation of a recently signed major trade pact.

Covid-19 crisis leads to lower incomes, living conditions for tens of thousands of families
FEATUREicon  02/12/2020 

Surveys all show that the living conditions of many Vietnamese have become worse because of Covid-19. However, economists are not recommending a second support package.

VIETNAM BUSINESS NEWS HEADLINES DECEMBER 1
BUSINESSicon  01/12/2020 

UNDP helps Da Nang build circular economy hub

FDI forecast to flow into supporting industries as investors set up new supply chains
BUSINESSicon  01/12/2020 

Đổi trò chơiForeign direct investment in supporting industries is expected to spike in the coming months as more and more foreign companies establish production facilities in Vietnam and seek to develop supply chains here, experts said.

Night-time economy waits for its bright days
BUSINESSicon  01/12/2020 

For HCMC, the delicious cake slice of evening economy in store for years will come to light as the Government is going to give it the greenlight soon. 

SOE managers receive VND151 million a month, just half of market level
BUSINESSicon  01/12/2020 

Đổi trò chơiThe monthly pay to chairs of state-owned economic groups is up to VND86.4 million a month, but the salary of managers of joint stock companies where the state holds a controlling stake is up to VND151.2 million a month.

Digital transformation accelerates online sales target of US$35 billion
BUSINESSicon  01/12/2020 

Vietnam is set to see 55% of the local population regularly participate in online shopping activities by 2025, with the value of goods purchased through the internet and online services reaching an annual average of US$600 per person.

More reforms needed in construction procedures
BUSINESSicon  01/12/2020 

More drastic reforms of construction-related administrative procedures must be carried to improve transparency and reduce costs for enterprises,

Hotel owners sell out to stave off bankruptcy
BUSINESSicon  01/12/2020 

Fusion Suites Saigon on Suong Nguyet Anh Street in District 1, HCMC, is being listed for sale at VND1,165 billion (US$50 million).

Many real estate firms owe tax as projects die
BUSINESSicon  01/12/2020 

A high number of businesses in the real estate sector are developers of 'clinically dead' projects, or projects that have disputes with clients.

 
 
 
Leave your comment on an article

OR QUICK LOGIN