UOB, Orix commit $50m to Vietnam hydropower player

UOBVM, a subsidiary of the United Overseas Bank, and Orix will each contribute $25 million to the deal. UOBVM will invest from its ASEAN China Investment Fund III, which closed at $300 million last year.

As a subsidiary of Vietnamese conglomerate Bitexco Group, Bitexco Power was established in 2014. It owns and operates 18 hydropower plants in Vietnam with a gross power capacity of around one gigawatt. The existing capacity can generate 3,500 gigawatt-hours of renewable energy every year.

With the new capital, Bitexco Power plans to consolidate its market leading position in the renewable energy sector through M&A and greenfield development.

Electricity demand in the country is expected to grow at annual rates of 10-20%, rising from 169.8 terawatt-hours (TWh) in 2015 to 615.2 TWh by 2030, according to the General Statistics Office of Vietnam. The government has liberalized the power sector and allowed market pricing in order to attract private investment.

"Hydropower is one of the most cost-efficient sources of electricity generation, and we believe Vietnam's growth will continue to drive the demand for renewable energy. By investing in Bitexco Power, we hope to participate in the growth of the power sector and play a role in the country's economic transformation," Seah Kian Wee, a managing director at UOBVM, said in a statement.

Two years ago, United Overseas Bank and Orix launched a $200 million mezzanine fund with a view to providing expanding capital to mid-sized companies in Southeast Asia.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Southeast Asia
• North Asia
• Cleantech
• Infrastructure
• Singapore
• Vietnam
• Growth capital
• UOB Venture Management
• ORIX Capital
• Japan