HSBC Vietnam backs major rooftop solar energy project for Vietnam
HSBC Vietnam backs major rooftop solar energy project for Vietnam
HSBC Vietnam will provide two wholly-owned subsidiaries of REE Corporation with a term loan facility and trade finance facilities for their rooftop solar energy project.
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The ground-breaking green credit agreements are under HSBC’s ambitious climate plan announced in October 2020 to provide between $750 billion and $1 trillion in financing and investment until 2030 for clients in all sectors to support them to progressively decarbonise.
This is also the first green finance in renewable energy that HSBC arranges in Vietnam for supporting REE as a long-standing corporate client of HSBC who aims to be the leading renewable energy and environmental business group in Vietnam with a strong focus on solar and wind energy and water sector.
The 7-year term loan will provide the funding of approximately VND660 billion ($28.7 million) for REE SE to invest in a VND1 trillion ($43.5 million) valued rooftop solar project, for which the corporation is setting up rooftop solar systems at factories across the provinces to produce at least 80MW of solar electricity till the end of 2020.
The trade facilities amounting to $150 billion were granted to REEPRO Co., Ltd. to finance the import of solar equipment and other working capital requirements under REEPRO’s capacity as engineering, procurement and construction (EPC) contractor for REE SE. The renewable power output will be sold to Electricity of Vietnam and the rooftop lessors.
In order to achieve a green credit by HSBC, REE SE’s project had gone through HSBC’s stringent credit approval and management process of sustainable financing controlled by the HSBC Asia-Pacific Sustainable Loans Committee, the dedicated body of the bank with rich experience in successfully arranging green financing in different fields around the world.
At the same time, both green facilities are required to meet the high standards of the international Green Loan Principles jointly issued by Loan Market Association and Asia-Pacific Loan Market Association. It includes four core components: use of proceeds, project selection and evaluation, management of proceeds, and reporting.
“Operating in Vietnam for more than 40 years, REE Corporation continues to go from strength to strength as a result of their in-depth market knowledge, strong strategic execution, and leveraging their undoubted experience. With our close strategic relationship that dates back over 30 years, HSBC is privileged to support many of REE’s projects which usually aim at providing additional value to their customers and also more broadly, Vietnamese society, and ultimately the economic growth of the country. As the bank that has accompanied REE SE in their debut solar energy project, we are very proud to continue our cooperation so that through our combined contributions, Vietnam can develop ‘clean and green’ renewable energy solutions," said Tim Evans, CEO of HSBC Vietnam.
“REE Solar Energy is among REE Group’s pivots to sustainable renewable energy development going forward. Aside from the attractive economics, embracing rooftop solar energy will allow us to contribute to energy savings by the commercial and industrial sectors while improving the environment and reducing the impact of climate change. HSBC’s financings for our green renewable energy initiative is another milestone in the lasting partnership between REE and HSBC, and we are delighted that the bank continues to extend its strongest support in our mission to not only do good for economic growth but for societal benefit as well,” said Huynh Thanh Hai, CEO of REE Corporation.
Aligning with Vietnam government’s national strategy on green growth, the prime minister’s Decision No.13/2020 to promote the development of solar energy projects in Vietnam, and the State Bank of Vietnam’s development scheme of green banking, HSBC’s dual green financing for REE SE and REEPRO shows the long-term vision of both organisations in building Vietnam’s sustainable energy capabilities.
“HSBC and REE both share a vision of growing our business while also ensuring we positively contribute to the country’s sustainable development. This is why we have come together and worked in tandem on this meaningful and exciting project. As a leading global bank, HSBC sees it as our own duty to support the global transition to a net-zero carbon economy through financing projects that are associated with this objective. On signing this green financing with REE, we are together fulfilling a commitment to play our part in leading the way for the national development of renewable energies," added Evans.
