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Keppel, Sovico cooperate on sustainable energy and urbanization solutions in Vietnam

February 26, 2022 | 02:00 am PT
Keppel Group and Sovico Group signed a Memorandum of Understanding on Feb. 25 to develop and roll-out sustainable energy and smart, sustainable township management services in Vietnam.

Through their subsidiaries, the two parties will coordinate to explore the development and roll-out of energy and environmental solutions, as well as identify, develop, operate and manage smart and sustainable projects in Vietnam’s key cities, starting with Ho Chi Minh City and Hanoi.

The MOU was signed in the presence of Vietnam’s President Nguyen Xuan Phuc, who is on a state visit to Singapore.

This collaboration marks a milestone in the strategic partnership between two corporations, leveraging the strengths of Keppel and Sovico Group’s proven track record and presence across a wide range of businesses including banking and finance, real estate, aviation and energy.

Nguyen Thi Phuong Thao, Sovico Chairwoman, hands over a Memorandum of Understanding to Loh Chin Hua, General Director of Keppel, on developing energy solutions and sustainable urbanization in Vietnam. Photo by Sovico

Nguyen Thi Phuong Thao, Sovico Chairwoman, hands over a Memorandum of Understanding to Loh Chin Hua, General Director of Keppel, on developing energy solutions and sustainable urbanization in Vietnam. Photo by Sovico

Keppel is one of the leading powerhouses of solutions for sustainable urbanization that has been investing in Vietnam for over three decades.

Loh Chin Hua, CEO of Keppel Corporation, said it is pleased to extend its collaboration with Sovico Group to provide sustainable energy and urbanization solutions for Vietnam.

"We are glad to contribute further to Vietnam’s development. The signing of the MOU is very much in line with Keppel’s Vision 2030, where we seek to provide solutions for sustainable urbanization, including energy and environmental solutions, as well as master planning and the development of smart and sustainable cities," said Hua.

Pham Khac Dung, vice president of Sovico Group, affirmed it supports the efforts of the United Nations towards sustainable development. The unit is committed to cooperating with like-minded partners across the globe. The partnership with Keppel further strengthens Sovico's development strategy.

"We are pleased and honored to join Keppel in growing the Vietnam-Singapore strategic partnership to new heights; and expanding cooperation into new growth areas on the basis of promoting solutions for people and people-centered developments, as well as creating environmentally friendly developments that contribute to the prosperity and sustainable development of the two economies," said Dung.

Sustainable energy, decarbonization solutions

Through its wholly owned subsidiary Keppel Energy Ventures Pte Ltd, Keppel Infrastructure Holdings Pte Ltd will collaborate with Sovico Group to harness sustainability-related technologies and develop end-to-end sustainable energy solutions, including renewables, electrification, energy efficiency and the treatment of domestic solid waste, in support of Vietnam’s transition to a green and carbon-neutral economy.

The collaboration will focus on scalable decarbonization solutions like the electrification of vehicles and charging infrastructure, smart microgrids, sustainable energy-from-waste and energy-as-a-service (EaaS), aimed at achieving large-scale greenhouse gas emissions reduction.

The two parties will also collaborate on harnessing the vast renewable energy potential in Vietnam for the development of sustainable fuel for sectors like power, industry, maritime transportation and aviation, where carbon emissions may be harder to abate.

For the aviation sector, the sustainable fuel can be supplied to Sovico’s VietJet Air and subsequently rolled out to other airlines.

This synergistic development comes on the back of Keppel Infrastructure’s work to explore the feasibility of producing green ammonia in Australia for export to meet the rapidly growing demand for carbon-free energy.

Green ammonia can be used as a direct feedstock in green energy generation, or as a hydrogen carrier to provide green hydrogen solutions.

Keppel Infrastructure’s EaaS is a long-term subscription service with zero or minimal upfront capital investment, which includes power, energy storage and the installation and operation of photovoltaic solar panels, super-efficient chiller systems as well as smart electric vehicle charging stations.

The initial roll-out in Vietnam will leverage Sovico Group’s large-scale commercial centers, office buildings, resorts, retail and urban residential areas across the country as well as extend to their eco-system of customers and partners.

Urban development

In addition to cooperating in urban development, which covers collaboration on smart and sustainable projects across Vietnam and the provision of related urban solutions and services, another MOU has been signed between Keppel Land Limited (Keppel Land), Keppel Urban Solutions, Sovico Group and Phu Long Real Estates Joint Stock Company (Phu Long), a member of Sovico Group.

The cooperation includes master planning and infrastructure planning, placemaking and township management services to create highly livable, vibrant spaces and digitally connected communities, starting with Mailand Hanoi City.

This strategic collaboration comes on the back of the binding heads of agreement entered by Keppel Land Vietnam Properties Pte. Ltd., Keppel Vietnam Fund and its co-investor through jointly held special purpose vehicles.

Together with Phu Long and its subsidiary, the companies are in relation to the acquisition of a 49 percent interest in three residential land plots, totaling 14.2 hectares, in Mailand Hanoi City, which was announced in January 2022.

According to statistics from the Ministry of Foreign Affairs of Vietnam, Singapore has become the largest foreign investor in Vietnam with 402 newly licensed projects and newly registered capital of $11.4 billion since early 2020 to-date.

Notwithstanding the impact of Covid-19, the Vietnam-Singapore strategic partnership is expanding with increased partnerships and cooperation in many fields yielding positive results.

The abovementioned transactions are not expected to have any material impact on the earnings per share and net tangible asset per share of Keppel Corporation Limited for the financial year ending Dec. 31, 2021, and the current financial year.

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