Leader Energy raised $23 M loan from HSBC to support Vietnam’s solar projects

A 593 billion Vietnamese Dong ($23.32 million) financing agreement was signed by HSBC Bank (Vietnam) Ltd. (HSBC Vietnam) and Malaysia-based Leader Energy Holding Berhad (Leader Energy), a wholly owned subsidiary of HNG Capital, to support the growth of Leader Energy’s solar projects in Vietnam.

HSBC said in a statement on Monday that this transaction is the bank’s second for Leader Energy in the nation, having previously financed a hydropower plant in 2017.

The statement claims that HSBC was Leader Energy’s only lender for the seven-year committed term loan.

Vinh Hao 6 (VH6), a recently acquired 50 megawatt (MW) solar power plant under Leader Energy, will be refinanced with the help of the loan.

Located in the province of Binh Thuan, the project started operating commercially in 2019. Electricity of Vietnam (EVN) is the project’s primary source of income, with electricity sales to them coming from a Feed-in-Tariff (FiT) of 9.35 cents per kilowatt hour (kwh) under a 20-year power purchase agreement (PPA).

The project offsets 75,131 tons of carbon dioxide emissions (CO2) annually by producing 83,000 megawatt hours (MWh) of electricity.

Since 2023, Leader Energy has owned VH6 in its entirety.

Leader Energy’s pledge to provide 500MW or more of renewable energy assets in Vietnam is reaffirmed by this acquisition.

Given Vietnam’s favourable climate and government commitment to reach net zero by 2050, the agreement also highlights the country’s potential for renewable energy.

Vietnam intends to step up its energy transition in response to the COP26 commitment since the country’s energy sector is responsible for more than half of its greenhouse gas emissions.

Additionally, the nation’s natural resources have the ability to draw additional capital into the expanding renewable energy industry.

“The refinancing arrangement, secured through HSBC Vietnam with close collaboration with HSBC Malaysia has offered more favourable term,” said Jenny Ng, Group Chief Financial Officer, Leader Energy.

She claims that the company’s focus on sustainable growth, commitment to upholding a solid financial foundation, and sound financial footing are all demonstrated by this strategic financial decision.

“The confidence shown by our financial partners is a testament to the robustness of our financial management, the underlying asset, and our ability to deliver,” she says.