High-interest payments on corporate bonds issued to fund a number of renewable energy projects in Vietnam are making it difficult for a number of renewable energy generators to turn a profit, Vietnam News is reporting.
Up until the last year or so bonds were a popular way to raise capital for a number of projects. They were also a popular investment vehicle due to their high-yields. It’s therefore no surprise that corporate bonds were used to finance renewable energy projects.
That said, though the article doesn’t mention it, renewable energy projects have faced a number of problems in maintaining consistent revenue streams. For example, solar producers in Central Vietnam are at times limited to selling just 70 percent of the power they generate to the state electricity provider on the grounds that the grid doesn’t have the capacity to handle it. Furthermore, feed-in-tariff policies toward the end of the last decade had operational dates attached to them and projects not online by said dates had to negotiate prices with the state power provider separately–for some generators those negotiations are still ongoing after more than two-years.