ORIX to Invest in Vietnam’s Largest Private Hydropower Company
Sep 02, 2016
TOKYO, Japan - September 2, 2016 - ORIX Corporation ("ORIX"), a leading integrated financial services group, and UOB Venture Management Pte Ltd. ("UOB") announced that they have agreed to jointly acquire approximately USD 50 million worth of the shares of Bitexco Power Corporation ("BPC"), operator of a hydropower generation business in Vietnam, through a third-party allocation of new shares. In this investment, ORIX has acquired approximately 50% or USD 25 million worth of the total shares acquired by both companies.
A member of the Bitexco Group, which develops real estate and infrastructure businesses in Vietnam, BCP owns and operates 18 hydro-power plants in Vietnam with a gross power capacity of around 1 GW. The existing capacity can generate about 3,500 GWh of clean energy annually, which is enough to provide electricity for about 2,700,0001 people in the country.
Against a rising population and economic growth, demand for electric power in Vietnam is expected to increase by an annual average of 10% to 12%, rising from 169.8 TWh in 2015 to 615.2 TWh by 20302. Given these circumstances, the Vietnamese government has declared a policy of phased-in liberalization of the electric power market as a way of meeting this vigorous demand. This is expected to eventually result in the complete deregulation not only of power transmission, but power generation and the wholesale and retail sale of electric power, providing more room for the entry of private enterprise into the electric power market.
ORIX has been aggressive in advancing the renewable energy business in Japan, which includes, inter alia, solar, wind, geothermal and biomass power generation. With generating capacity of about 890 MW, it is one of the largest players in the Japanese solar power generation market. Overseas, ORIX projects include a wind power generation business in India3 , and this latest agreement represents its first investment in the energy business in Vietnam.
ORIX will continue taking advantage of its experience and in-depth expertise in the field to actively expand its energy-related businesses in Asia.
1 Source: World Development Indicators: Power and communications, World Bank. Based on 99% of the population having access to electricity and a consumption rate of 1,306 kWH per capita.
2 Source: General Statistics Office of Vietnam
3 Press release dated March 17, 2016:
“ORIX to Participate in Large-Scale Wind Energy Projects with IL&FS in India”
|Company name||Bitexco Power Corporation|
|Location||Hà Giang Province, Socialist Republic of Vietnam|
|Representative||Vu Quang Hoi|
|Business||Hydropower plant operation and development|
|No. of power plants||18 (15 in operation, three under construction)|
|Gross power capacity||970 MW|
■ Dak Mi 4 Hydro Power Plant
Corporate Planning Department
ORIX Corporation (TSE: 8591; NYSE: IX) is a financial services group which provides innovative products and services to its customers by constantly pursuing new businesses. Established in 1964, from its start in the leasing business, ORIX has advanced into neighboring fields and at present has expanded into the lending, investment, life insurance, banking, asset management, automobile-related, real estate and environment and energy-related businesses. Since its first overseas expansion into Hong Kong in 1971, ORIX has spread its business globally by establishing locations in a total of 37 countries and regions across the world. Moving forward, ORIX aims to contribute to society while continuing to capture new business opportunities. For more details, please visit our website: http://www.orix.co.jp/grp/en/
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These documents may contain forward-looking statements about expected future events and financial results that involve risks and uncertainties. Such statements are based on our current expectations and are subject to uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Factors that could cause such a difference include, but are not limited to, those described under "Risk Factors" in the Company's annual report on Form 20-F filed with the United States Securities and Exchange Commission and under "4. Risk Factors" of the "Summary of Consolidated Financial Results" of the "Consolidated Financial Results April 1, 2015 - March 31, 2016."
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