The Asian Development Bank (ADB) and energy transition partner GreenYellow Vietnam have signed a 13.8 million USD loan agreement for rooftop solar development in Vietnam.
Rooftop solar projects are expected to provide reliable and affordable power for consumers.
The loan will support the development and operation of solar power systems located on the rooftops of commercial and industrial businesses across the country, the ADB said in a release.
The financing package includes a 3 million USD loan from the ADB and 10.8 million USD from three other agencies, with the ADB as the arranger.
A 3 million USD grant from the Climate Innovation and Development Fund (CIDF), administered by ADB, will also be provided.
The grant will help address two major hurdles in financing solar assets with a long economic life in Vietnam, including the lack of long-term Vietnamese funding at a fixed interest rate and the potential volatility of the VND-USD exchange rate.
According to ADB Director General for Private Sector Operations Suzanne Gaboury, solar rooftop offers an efficient way for Vietnam to deploy substantial amounts of additional renewable energy capacity, while providing reliable, low-cost energy to consumers, which helps attract and retain business and enhance Vietnam’s global competitiveness.
This is the ADB’s first financing of a solar rooftop portfolio for commercial and industrial segments in Vietnam.
Rooftop solar is an emerging form of renewable energy supply in Vietnam and its adoption in this sector has been hindered by high upfront costs and limited financing channels.
With a planned total installed capacity of up to 32.3 megawatts at its peak, this project is set to increase clean energy supply to the sector by at least 31.5 gigawatt-hours annually, reducing 15,530 tons of carbon dioxide emissions by 2025.