General Agreement for Investment Credit Line and Loan Agreement for Industrial Park Construction and Operation Project and Rooftop Solar Power Generation Project by Vietnamese Subsidiary of Sumitomo Corporation
Supporting Overseas Business Expansion of Japanese Company for Realizing Decarbonized Society
- Region: Asia
- Overseas Investment Loans
The Japan Bank for International Cooperation (JBIC; Governor: MAEDA Tadashi) signed on March 24 a General Agreement for an investment credit line totaling up to approximately USD29 million (JBIC portion), and on March 30 a Loan Agreement totaling up to approximately USD8 million (JBIC portion) based on the credit line, with Thang Long Industrial Park II Corporation (TLIP2), a Vietnamese subsidiary of Sumitomo Corporation. The loan is co-financed with a private financial institution, bringing the total co-financing amount to USD14 million.
The credit line will support the expansion project of Thang Long Industrial Park II and the rooftop solar power generation project to be conducted by TLIP2 in the Hung Yen province in the north of Vietnam. The General Agreement was signed at the occasion of a workshop, “Japanese Business Expectation and Investment Trends in the New Normal in Vietnam,”*1
jointly hosted by the Foreign Investment Agency of the Vietnamese Ministry of Planning and Investment and JBIC’s Representative Office in Hanoi on March 24.
The loan is intended to finance the funds necessary for TLIP2 to install and operate rooftop solar power generation systems with a total installed capacity of 20MW peak in Thang Long Industrial Park II and sell the generated electricity to its tenant companies.
Sumitomo Corporation aims to shift its management resources to the renewable power generation business and the social infrastructure business, where the potential for market growth is particularly high. Since opening Thang Long Industrial Park in Vietnam in 1997, Sumitomo Corporation has been supporting Japanese manufacturers in entering the Vietnamese market for 25 years. Combined with the expansion project of TLIP2, the total land area of Thang Long Industrial Park, Thang Long Industrial Park II, and Thang Long Industrial Park (Vinh Phuc) is expected to be one of the largest of its kind in Vietnam for Japanese companies. Furthermore, given the increasing focus on ESG on the back of climate change issues, the demand for green electricity has been growing globally in recent years in many sectors, particularly the manufacturing industry, which consumes large quantities of electricity. To respond to society’s demand for green energy, Sumitomo Corporation intends to contribute to the efforts of Japanese companies and the government of Vietnam to achieve a carbon-neutral society through these projects. The loan will support Sumitomo Corporation’s overseas business expansion, thereby contributing toward maintaining and improving the international competitiveness of Japanese industry.
As Japan’s policy-based financial institution, JBIC will continue to provide financial support to assist Japanese companies in the overseas expansion of their businesses by drawing on its various financial facilities and schemes for structuring projects.