The Asian Development Bank (ADB) announced on September 11 that it has signed a loan agreement with the GreenYellow Smart Solutions Vietnam Co., Ltd. of up to $13.8 million for rooftop photovoltaic (PV) solar systems, to help increase the supply of clean and affordable energy for commercial and industrial consumers in Vietnam.

The loan will support the development and operation of solar PV systems located on the rooftops of commercial and industrial businesses around the country. The financing package comprises a $3 million loan from ADB’s ordinary capital resources and $10.8 million in parallel loans from FMO, the responsAbility Fund, and Société Générale, with ADB as mandated lead arranger.

A $3 million grant from the Climate Innovation and Development Fund (CIDF), administered by the ADB, will also be provided. The grant will help crowd in an international commercial bank by addressing two critical hurdles in financing solar assets with a long economic life in Vietnam: the lack of long-term VND funding at a fixed interest rate, and the potential volatility of the VND-USD exchange rate.

Ms. Suzanne Gaboury, Director General for Private Sector Operations at ADB, said that as the Asia-Pacific’s climate bank, the ADB is increasingly focused on mobilizing private capital to finance renewable energy projects that the region urgently needs. “Solar PV rooftop offers an efficient way for Vietnam to deploy substantial amounts of additional renewable energy capacity while providing reliable, low-cost energy to consumers, which helps attract and retain business and enhance Vietnam’s global competitiveness.”

This is ADB’s first financing of a solar PV rooftop portfolio for the commercial and industrial segment in Vietnam. Rooftop solar is an emerging form of renewable energy supply in Vietnam and its adoption in this sector has been hindered by high upfront costs and limited financing channels. With a planned total installed capacity of up to 32.3 MW at its peak, the project is set to increase clean energy supply to the sector by at least 31.5 gigawatt-hours annually, reducing 15,530 tons of carbon dioxide emissions by 2025.

“Embedded within our core business is a profound commitment to development impact, and our cooperation with the ADB uniquely aligns with our corporate mission towards innovative power distribution and driving energy transition,” said Mr. Sebastien Prioux, Chief Executive Officer of GreenYellow Vietnam. “ADB’s instrumental role in fostering connections among like-minded partners is integral to our collective journey in actively advancing sustainable development.”

CIDF is a blended finance facility managed by the ADB, established in September 2021 with an initial $25 million philanthropic commitment from Bloomberg Philanthropies and Goldman Sachs. The fund has the potential to unlock up to $500 million in private sector and government investments to support sustainable low-carbon economic development.