Thai power firm pins great expectations on largest solar energy project in Vietnam

11:51 | 15/07/2020 Cooperation

(VEN) - It is a landmark year for B.Grimm Power Public Company Limited. It celebrates its 25th anniversary in Thailand and its two-decade plus presence in Vietnam, having invested around US$650-700 million in the country. Preeyanart Soontornwata, President of B.Grimm Power Public Company Limited, talked about the company’s hopes for the largest solar power project in Vietnam and measures to sustain and thrive during the challenging time of the Covid-19 pandemic in an interview with Vietnam Economic News’  My Phung.

thai power firm pins great expectations on largest solar energy project in vietnam
Preeyanart Soontornwata, President of B.Grimm Power PCL

Could you please share with us a brief picture of your renewable energy projects in Vietnam and B.Grimm Power’s longstanding presence in the country?

B.Grimm Power has been doing business in Vietnam for more than two decades and expanding business to renewable energy since 2018. The company’s two large solar power projects were put into commercial operation in June 2019, including the Dau Tieng Tay Ninh 1&2 plants (DTE 1&2 - the largest in ASEAN) with 420 MW installed capacity in Tay Ninh Province; and Phu Yen TTP with 257 MW installed capacity in Phu Yen Province. These two projects sell electricity to EVN under a 20-year power purchase agreement (PPA). We have been working closely with our strategic local partners, the Xuan Cau Group and TTVN Group, who also have stakes in both ventures. The performance of both solar projects has been very good so far.

What are the company’s strengths and challenges?

B.Grimm Power has more than two decades of experience in the power industry in terms of project development and provision of high-standard services. We now have 47 operating projects with total installed capacity of 3,019 MW, 70 percent from combined cycle power plants and 30 percent from renewable power. All of B.Grimm Power’s projects have been developed and built within the planned time and budget with contributions from highly experienced in-house teams. Our strong relationship with world-class Engineering Procurement Construction (EPC) contractors and suppliers is also a factor.

In Vietnam, as already mentioned, we have been active for more than two decades, starting with the transmission business at the Amata City Bien Hoa Industrial Park.

We believe that our corporate culture is another advantage. B.Grimm Power is carrying on the group’s tradition, begun 140 years ago (since 1878), of “Doing Business with Compassion” for the benefit of the society and country. We are always committed to running a socially and environmentally responsible business, scoped by corporate governance principles, strict compliance with applicable laws and regulations, non-tolerance of corrupt practices, and systematic as well as watertight risk management.

Yet another key factor for us is an efficient workforce, galvanized by our long-standing corporate culture, so it is fair to say that our success is a testimony to professionalism and unity at work. Our employees are encouraged to acquire diverse expertise, proficiency and experience towards responding to all circumstances and change, driving the corporation towards even greater success.

For tackling all challenges, we rely on local partners and legal consulting firms with expertise in the Vietnamese market to fill gaps and guide compliance with regulations and government policies and maintain good relationships with local companies, organizations and communities.

thai power firm pins great expectations on largest solar energy project in vietnam
Vietnamese Prime Minister Nguyen Xuan Phuc (third from the left) and his Thai counterpart Prayut Chan-o-cha at the signing ceremony of DTE 1&2 solar power project on June 15, 2018

What is your assessment of Vietnam’s power sector? Is Vietnam’s renewable energy sector attractive to Thai investors?

First of all, Vietnam is a very attractive investment destination in terms of its consistently strong growth, strengthening of regulatory framework, continuous improvements in infrastructure and a large workforce with growing skills and talents. Given that economic growth will strongly increase demand for electricity, the opportunity for power plants is still huge.

As far as renewable energy is concerned, Vietnam has a concrete plan to develop more renewable power to reduce carbon emissions. The government has facilitated the development of renewable energy by offering attractive tariffs to lure local and foreign investors. Nonetheless, future investment depends very much on available conditions and advantages of a favorable investment policy, capacity of the transmission lines and grid-connection and support from the local government where the project is or can be located. All these factors will decide the interest of investors and their investment decisions.

What are B.Grimm Power’s long-term investment plans in Vietnam?

There are lots of opportunities in Vietnam. The economy has been growing very fast and the long-term outlook is very promising, so demand for utilities will also grow very fast. We have been studying additional investments in Vietnam, especially in wind farms and LNG-to-power projects.

How has the Covid-19 pandemic affected your business and operations in Vietnam?

We have not had noticeable impacts of the Covid-19 pandemic on our operations in Vietnam. All projects have been able to operate normally and our cash flow has remained strong. For the negotiation of new projects, we have been able to use the video conference during the social distancing campaign, so there has been limited impact on new investments as well.

In responding to the pandemic, we were advantaged by the fact that we are constantly readying ourselves for crisis situations. Firstly, we had THB21 billion on hand at the end of the first quarter of 2020 and we have raised working capital from financial institutions to THB9 billion to increase flexibility during the crisis. Secondly, our portfolio diversification also ensured that there was limited impact of Covid-19 on our total revenue. We have been also monitoring our industrial clients (who contribute around 28 percent of total revenue) closely; most clients are world-class companies with very strong fundamentals, so we noticed that all clients could continue operations even during the peak period of Covid-19 in Thailand. Thirdly, we have been supporting the society and communities affected by the pandemic through donations of more than THB50 million with the intention of staying with all stakeholders to overcome the Covid-19 crisis together.

My Phung