Bank of China (Macau Branch) contributes to the $81 million tranche of a $173 million syndicated loan for the Lotus Wind Power Project

BOCHK and BOC (Macau Branch) contributions to the $81 million B tranche of a $173 million syndicated loan for the Lotus Wind Power Project In August 2021, Lien Lap Wind Power Joint Stock Company (Lien Lap), Phong Huy Wind Power Joint Stock Company (Phong Huy), and Phong Nguyen Wind Power Joint Stock Company (Phong Nguyen) — three special purpose vehicles (SPVs) and joint ventures of Renova Inc. [60% equity stake] and Power Construction Joint Stock Company No. 1 [40% equity stake] — signed a $173 million limited recourse project financing package for the Lotus Wind Power Project: a $35 million ‘A’ loan from the Asian Development Bank (ADB); a $81 million syndicated ‘B’ loan from Bank of China (Hong Kong) Limited; Bank of China Limited Macau Branch; Société Générale, Singapore Branch, and Triodos Groenfonds N.V.; a $25 million loan from Japan International Cooperation Agency (JICA); and a $32 million loan from Export Finance Australia (EFA).

The loans carried the following borrowing terms: 15-year maturities and interest rates of LIBOR plus a 3-5% margin. BOC contributed $27.13 million USD to the loan syndicate.

The purpose of the independent power project (IPP) was to develop, construct, and operate three wind farms — the VND1.973 trillion 48MW Lien Lap Wind Power Plant; the VND1.913 trillion 48MW Phong Huy Wind Power Plant; and the VND1.911 trillion 48MW Phong Nguyen Wind Power Plant — and internal transmission lines in Quang Tri (Quảng Trị) Province.

The SPVs (project companies) each have 20-year power purchase agreements (PPAs) with state-owned monopoly electricity distributor Vietnam Electricity (EVN) under a feed-in tariff (FIT) of $0.085 per kWh. Danish wind power company Vestas Wind System was awarded the contract to install 36x V150-4.2MW wind turbines.

Each wind power plant achieved a commercial operation date in October 2021. The originally scheduled COD for each wind power plant was October 31, 2021.

ADB helped design and enforce the gender equality and safeguarding measures integrated into the Lotus Wind Power Project.

The gender equality measures were to be enforced at the parent company level (i.e., on PPC1), while safeguarding measures at the subsidiary level (i.e., Lien Lap Joint Stock Company, Phong Huy Joint Stock Company, and Phong Nguyen Joint Stock Company).

The gender equality measures stemmed from a clearly defined process undertaken by ADB that involved sending the parent company (PC1) a due diligence questionnaire.

The questionnaire assessed the company’s baseline practices for integrating gender equality measures across business functions, including procurement, service and product delivery, training and development, and workplace policies.

Armed with the results of this questionnaire and in consultation with the parent company, ADB developed a Gender Action Plan (GAP), which included specific targets for PC1, e.g., for the number of jobs provided to women during the construction phase of project, as well as for the number of women managers employed by PC1 and its subsidiaries; development of an anti-sexual harassment policy and training of staff on the policy; and inclusion of women from the local community (for the first time) in PC1’s vocational training on wind power operation and management.

The safeguarding measures proposed for the project stemmed from the ADB classification as category B on environment, involuntary resettlement, and Indigenous Peoples. On the latter, the ADB considered the impacts of the project on ethnic minority groups.

As a result, the ADB required Phong Huy Wind and Lien Lap to develop a combined Livelihood Restoration and Ethnic Minority Development Plan (LREMDP) and Phong Nguyen was required to develop an Ethnic Minority Development Plan (EMDP).

The plans aimed to mitigate the impact of the project on ethnic minorities and socially and economically vulnerable groups, including households led by women.