TEPCO invests in PE-backed Vietnam hydro project

The transaction will give TEPCO, Japan's largest utility, a 36.4% stake in Viet Hydro, the manager of the Coc San project. Coc San is a run-of-the-river hydroelectric plant – in which electricity is generated through water flow without creating a large reservoir – located in the Dum River Valley in Vietnam’s Lao Cai province.

Singapore-based infrastructure development company Infraco Asia Development will exit its stake in Viet Hydro to TEPCO. Financial details of the transaction have not been disclosed. Infraco originally invested $7.5 million in the project in 2011 when its initial capital was expended and Viet Hydro had difficulties securing long-term loan financing.

“Selling our stake in the Coc San project allows Infraco Asia to further catalyze infrastructure development for our mandated countries,” said Allard Nooy, CEO of Infraco, in a statement. “By identifying and mitigating risks early on, we attracted private sector investment to a project that was once considered too risky.”

Nexif Energy, which formed in 2015 through a partnership between Denham and power management company Nexif, invested an undisclosed amount in Viet Hydro in 2016 as construction was nearing completion. The plant entered operation the same year with a capacity of 29.7 megawatts and a 20-year power purchase agreement with Vietnam Electricity.

This is TEPCO’s first hydropower deal outside Japan. The company recently began investing in renewable energy assets both domestically and overseas in order to improve its corporate value in the face of increasing competition within Japan’s power sector, with a particular focus on Southeast Asia. It hopes to help investees strengthen their profitability through increased efficiency, based on its experience in Japan.

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• Topics
• Southeast Asia
• North Asia
• Infrastructure
• Cleantech
• Trade sale
• Expansion
• Vietnam
• Japan
• energy