Sumitomo scoops up 49 per cent stake in Danang hydropower plants

Sumitomo scoops up 49 per cent stake in Danang hydropower plants

Sumitomo Corporation has acquired a 49 per cent stake in Mekong Electric Power Engineering and Development JSC, which owns the Dak Di 1 and Dak Di 2 run-of-river hydropower ventures in Danang.

The Dak Di 1 and Dak Di 2 hydropower plants

The purchase from GreenSpark Group, a renewable energy developer, was announced on October 23.

The hydropower ventures, which commenced operations in 2022, have a total generation capacity of 48 MW, with a 20-year power purchase agreement with Vietnam Electricity (EVN). This represents Sumitomo Corporation's first hydropower investment in Vietnam.

Through the investment, Sumitomo Corporation aims to contribute to securing renewable energy sources and advancing decarbonisation in Vietnam, while promoting initiatives in energy transformation, one of the growth areas identified in its current medium-term management plan.

As economic growth continues, Vietnam faces challenges in meeting increasing electricity demand and maintaining grid stability while renewable energy deployment expands, all while targeting carbon neutrality by 2050. Against this backdrop, the Vietnamese government is promoting the expansion of hydropower as a baseload power source. The hydropower ventures contribute to regional energy security and support Vietnam's decarbonisation efforts.

Under Vietnam's energy plans, Sumitomo Corporation intends to use this investment as a starting point to secure stable renewable energy sources, and pursue further acquisitions and development of high-quality hydropower projects in the country. Additionally, by leveraging the emerging Direct PPA system in Vietnam, Sumitomo Corporation is considering the potential to provide sustainable power to its industrial parks and smart cities, further contributing to a carbon-neutral society.

VIR