Modern Energy Management (MEM) has won the project management services for development of the intertidal Tra Vinh windfarm.
Under the terms of the development co-operation agreement signed by Woojin Construction, Tra Vinh Wind Power and Climate Fund Managers, who provided development funding for the scheme, MEM will supply a dedicated project manager to coordinate development at what will be one of Vietnam’s first commercial-scale windfarms.
Once complete, the project is expected to have a total generating capacity of 144MW.
“The Vietnamese wind market possesses considerable investment potential for projects that focus on the fundamentals as a means of reducing costs and ensuring sufficient returns for investors,” said Lars Lund, director, Modern Energy Management.
“To date, investors have struggled to overcome the relatively low FiT and high costs of capital. At Tra Vinh, Modern Energy Management supplied a dedicated project manager who will oversee the initial development, ensuring the project matures as planned enabling bankability.”
With growing domestic demand for electricity, the Vietnamese government has committed to sourcing 10% of its electricity from renewable sources by 2030, while its strong economic growth has similarly contributed to making the country an attractive prospect for clean energy development.
To date, however, difficulties in achieving financial returns commensurate with the risk profile of projects located in the country, and questions regarding the bankability of Vietnam’s PPA offering, have deterred further investment in the country’s renewables sector.
By drawing on its unique Investment Grade Verification methodology, which bridges the various financial, commercial and technical siloes that can arise in the course of developing wind assets, MEM expects the Tra Vinh windfarm to be the first to successfully resolve these issues.
Nathan Schmidt, head of Asia at Climate Fund Managers, said: “Vietnam is one of our key markets, due to the government’s long-term commitment to clean energy and the strong renewable resources the country possesses.
“MEM’s knowledge of the Vietnamese market and understanding of the project dynamics will safeguard strong returns for our investors, as we look to accelerate the delivery of renewable energy projects in emerging markets to benefit local communities.”