IFC, a member of the World Bank Group, and Armstrong S.E. Clean Energy Fund are investing in Gia Lai Electricity Joint Stock Company (GEC), which is a small hydropower developer in Vietnam.
IFC will take a 16% and Armstrong a 20% equity stake in the company, according to a press release from Armstrong Asset Management. As shareholders, they will help GEC expand its hydropower portfolio and invest in other renewable energy segments, such as wind and solar. GEC has 84.4 MW of installed hydropower capacity across 15 run-of-river plants in Vietnam.
“Support by IFC and Armstrong as shareholders will not only enable us to expand our core business in hydropower but also help us become a leading renewable energy company and provide sustainable alternatives to fossil fuel-based power generation in Vietnam,” says Le An Khang, chief executive officer of GEC. “Their investment is a vote of confidence in Vietnam’s hydropower sector potential and should help attract more international investors.”
Hyun-Chan Cho, IFC head for infrastructure and natural resources for Asia Pacific, agrees, saying, “We believe IFC’s investment is an important step to encourage other investors to tap into the rich potential of Vietnam’s green energy sector, where participation by foreign investors is still modest.”
And Armstrong’s Andrew Affleck, managing partner, says, “We believe GEC is well-positioned to capture the strong growth potential in Vietnam’s renewable energy sector.”
With an expanding renewable energy portfolio, GEC will contribute to the government’s goal of increasing Vietnam’s installed power capacity by 14% annually between 2015 and 2030, Armstrong says.
IFC has invested more than $1 billion in 75 hydro projects in 25 countries over the past decade, to promote hydropower’s responsible and sustainable development in developing countries.
Armstrong S.E. Clean Energy Fund is a dedicated renewable energy private equity fund based in Singapore.