Norfund Partners with Norsk Solar to meet growing demand for renewable power in Vietnam

March 1, 2022

Norfund is joining Norsk Solar and Nordic Impact Cooperation (NIC) as investors in the 11 MW solar plant portfolio recently constructed by Norsk Solar in Vietnam.

NIC is a joint venture between Norsk Solar and Finnfund, a development financier and impact investor majority-owned by the Finnish state.

The investment establishes a new partnership between Norfund, Norsk Solar and Finnfund and gives Norfund a 35 percent ownership stake in one of the largest single-client rooftop solar PV systems in Vietnam. The 11 MW project was built on-site at shopping centres owned by Central Retail, one of southeast Asia’s largest retail conglomerates. A long-term Power Purchase Agreement has been signed with Norsk Solar.

“Norsk Solar is proud to include Norfund as an investor in our newly built corporate solar project in Vietnam. The involvement of two state impact investors, both Norfund and Finnfund, is a validation of our business model and strengthens our capability to expand in southeast Asia,” says Øyvind L. Vesterdal, CEO of Norsk Solar.

Norfund has been following closely the positive development of Norsk Solar, and we are delighted to see yet another Norwegian developer of renewable energy succeeding in establishing itself in developing markets. The partnership with an important company such as Central Retail in Vietnam is a confirmation of what they have accomplished. We are happy to partner with Norsk Solar in offering capital and competence that contribute to increased access to affordable, clean energy, enabling job creation and avoiding CO2-emissions.

Inge Stølen, Senior Investment Manager in Norfund

Meeting the increasing corporate demand for clean electricity

Norfund’s current investment and Finnfund’s existing partnership with Norsk Solar via NIC demonstrate that Nordic state impact investors are supporting the energy transition with innovative financing platforms for distributed generation and non-utility investments. Under NIC, EUR 15 million has been earmarked exclusively for Norsk Solar projects within the C&I segment and other related projects across developing markets. Adding Norfund as a new partner in Vietnam will further support Norsk Solar’s expansion and help meet the rapidly growing corporate demand for electricity.

“Our mission, to give companies the power to choose renewable energy, is in full alignment with Norfund’s goal of reducing poverty and fighting climate change. By joining forces we can do even more to support sustainable growth in developing countries, help create new jobs and reduce emissions while also securing long-term recurring revenues for all investors,” says Vesterdal. 

Will offset up to 200,000 tonnes of carbon emissions

Vietnam is one of the countries where investments in renewable power solutions can benefit the climate most, as more than half its electricity supply is from coal. The Norsk Solar power plants that Norfund is investing in will generate over 300,000 MWh of clean electricity and contribute to offsetting more than 198,000 tonnes of CO2 emissions over the systems’ lifetimes.