VN04 Viet Nam Distributed Solar – Solar Rooftop Leasing Finance Facility

At a Glance

Strategic Outcomes SO3 Increased access to sustainable services
Start Date Q1  Dec 1, 2018
End Date q1 Dec 31, 2020
Funding Source Core
Actual Budget (USD) 108,671
Budget Percentage 96%
Actual Expenditure (USD) 104,164
Status Complete
GGGI Share (USD) 108,671
Poverty and Gender Policy Markers poverty
Name of Client (Lead/Prime implementer if GGGI is part of a consortium) GGGI
Participating Organization (Funding/donor)
Name of consortium members, if any Clean Energy Investment Accelerator
Thematic Area
  • Sustainable Energy
GGGI Project Code : VN04
Project Manager and Staff +
Tero Tapio Raassina

Principal Investment Specialist

Thinh Ngoc Tran

Senior Investment Officer, Viet Nam

Project context, objectives and description

Vietnam has over 328 industrial zones, with over 96,300 ha that represented a strong potential for solar rooftop installation in commercial & industrial (C&I) sector.  However, the development of solar rooftop in C&I sector has not achieved its potential yet due to certain barriers that C&I companies experiencedi.) high up-front CAPEX, ii.) commercial feasibility, iii.) high collateral requirements and high transaction costs, iv.) no experience in solar business, v.) lack of standardization and scalable business models.  

Considering these obstacles, the GGGI, in partnership with the Clean Energy Investment Accelerator, acting as financial arranger and accelerator to form a C&I Solar Finance Facility (SFF) in Viet Nam, playing a crucial role in mobilizing multi-layered blended financing, unlocking domestic capital to green investments and enabling proven solar companies to get access to non-recourse project finance. Through the SFF, the Solar engineering, procurement and construction (EPC) receive non-recourse debt financing at relatively low costs and get relatively quick access to working capital, removing the main barriers in C&I Solar in Viet Nam. The SFF is expected to raise US$ 20 million by the end of 2020aiming to support the development of over 25 MW solar rooftop projects.  

The project is expected to help reduce over 32,000-ton CO2-emisison annually and create over 54 new green jobs.

The C&I Solar Finance Facility (SFF), once established, will provide a systematic and scalable lending solution through the mobilization of multi-layered blended financing; second, to catalyze C&I rooftop solar projects and third, to accelerate Viet Nam’s energy transformation from coal power towards renewable energy. Deploying the potential of solar energy at production sites would not only help manufacturing industries in Viet Nam improve their power supply reliability and reduce the burden on national power demand but also, help the C&I sector to reduce their significant expenses on electricity consumption caused by high tariffs during peak hours. Moreover, the participating financial institutions will benefit from the creation of a new loan product for industrial clients, building technical capacity for solar rooftop investment appraisal and monitoring, which will enable them to scale up renewable energy lending to industries.  

The project aligns with the IO.2 Increased green growth investment flows which enable partner governments to implement green growth policies.’ 

Type of services provided, and results achieved

Impact: Viet Nam reduces GHG emissions and increases green jobs. 

Outcome: N/A 

Project Outputs completed in 2019:  

i.Green Growth Policies:N/A 

ii. Green Investments:  

  • A legal assessment has been conducted that indicated relevant business models for solar rooftop implementation in C&I sector in Vietnam. Following this work, GGGI has developed investment structures and approached international development financial institutions and local financiers for structuring this C&I SFF. Currently, the interested financiers are identified and GGGI expect to continue assisting the interested financiers on structuring the SFF. 

iii. Capacity Building and Knowledge Products: N/A