UOB Venture Management (UOBVM), a wholly-owned subsidiary of United Overseas Bank Limited, and ORIX Corporation (ORIX) has announced that they will each invest US$25 million in one of Vietnam’s largest privately-owned hydropower companies, Bitexco Power Corporation.
Bitexco Power owns and operates 18 hydropower plants in Vietnam with a gross power capacity of around one gigawatt. The existing capacity can generate about 3,500 gigawatt-hours (GWh) of renewable energy annually, which is enough to provide electricity for about 2.7 million people in the country.
Bitexco Power plans to use the new capital for business expansion and consolidate its market leadership position further in the renewable energy sector.
With the rapid growth of Vietnam’s economy over the past decade, power consumption has been rising dramatically. The General Statistics Office of Vietnam estimates that electricity demand will continue to expand at annual growth rates of between 10 per cent and 12 per cent, rising from 169.8 terrawatt-hours (TWh) in 2015 to 615.2 TWh by 2030.
To meet this rising demand, the government has liberalized the power sector and introduced market pricing to attract private investment.
UOBVM manages about US$1 billion in assets. The investment in Bitexco Power will be allocated from its ASEAN China Investment Fund III. This fund invests in growth-oriented companies in East and Southeast Asia, with emphasis on the 10 countries of ASEAN and China.
Mr. Seah Kian Wee, Managing Director of UOBVM, said:
“Hydropower is one of the most cost-efficient sources of electricity generation, and we believe Vietnam’s growth will continue to drive the demand for renewable energy. By investing in Bitexco Power, we hope to participate in the growth of the power sector and play a role in the country’s economic transformation.”
Mr. Yuichi Nishigori, Corporate Executive Vice President of ORIX, said:
“Bitexco Power is our first investment in Vietnam’s power sector, which is showing strong growth potential. We believe Bitexco Power is in the best position to benefit from the country’s ongoing reform of the electricity market,underpinned by the rising demand for electricity. Following this investment, we are pleased to announce our further business expansion in the renewable energy sector across Asia.”
Mr. Ian Fox, CEO of Bitexco Power, said:
“The acquisition of shares by globally-renowned institutions – UOB and ORIX – will help enable Bitexco Power to continue its rapid growth in the increasingly dynamic Vietnamese renewable energy space. It is also a reflection of their confidence in our ability to meet international corporate governance standards and our business plan execution, necessary to deliver longterm value to stakeholders and to contribute to the growth of the country.”