Malaysia's Leader Energy secures HSBC deal for its Vietnam portfolio

Malaysia's Leader Energy Holding Berhad (Leader Energy), a wholly owned subsidiary of HNG Capital, signed the deal on July 8.

The agreement marks the bank's second transaction with Leader Energy in Vietnam, following the financing of a hydropower plant in 2017.

HSBC is acting as the sole lender of the seven-year loan, which Leader Energy will use to support the refinancing of Vinh Hao 6 (VH6), a newly acquired 50MW solar power plant.

Located in the central province of Binh Thuan, the project entered into commercial operation in 2019, generating all its revenue from the sale of electricity to Vietnam Electricity with a feed-in tariff of 9.35 cents/kwh under a 20-year Power Purchase Agreement. The project generates 83,000MWh and offsets over 75,130 tons of greenhouse gas (GHG) emissions a year.

VH6 has been fully owned by Leader Energy since last year, reaffirming the company's commitment to more than 500MW of renewable energy assets in Vietnam.

The deal also showcases the renewable energy potential of Vietnam, given the government's pledge to achieve net-zero emissions by 2050. Following this commitment made at COP26, Vietnam is aiming to focus on energy transition, as the sector accounts for more than half of its GHG emissions. Furthermore, the country's natural resources offer the potential of attracting more investment for the renewable energy sector here.

Jenny Ng, group CFO of Leader Energy, said, "We are pleased with the successful refinancing of our VH6 as the arrangement, secured through HSBC Vietnam with the close collaboration of HSBC Malaysia, has provided more favourable terms."

"This financial decision demonstrates our ability to commit to being partners in Vietnam's energy transition. We are expanding our renewable energy portfolio here to help the country fulfil its commitment to achieving its net-zero goal by 2050," he added.

Ahmed Yeganeh, country head of Wholesale Banking, HSBC Vietnam said, "We are proud to continue supporting Leader Energy in its efforts to decarbonise Vietnam's energy sector and this deal demonstrates how the financial sector can play an active role in unlocking the renewable energy potential of the country."

The United States Mission to Vietnam has applauded the government for approving a decree on the direct power purchase agreement.

Dutch Entrepreneurial Development Bank (FMO) has proposed to place $30 million into greenfield renewable energy platform Sustainable Asia Renewable Assets (SARA).

Both foreign and local groups are seeking progress in Vietnam’s energy sector to tap into the green growth potential through big deals.