Renewable energy firms grapple with debts

BCG Energy, a developer of solar and wind power projects in central and southern Vietnam, is behind on bond interest payments totaling VND176 billion ($7.26 million), seeking to extend its payment deadline to year-end. The bond lots were issued in April and May 2021.

Similarly, Trung Nam Dak Lak 1 owes over VND51 billion in interest, citing unpaid revenues from September electricity sales.

Since June, 15 companies in the renewable energy sector have been late in paying bond interests and they have all asked investors for a delay in payment.

Banks are struggling to get their money back from these companies. Agribank has recently put up for auction the VND1.2 trillion debt of the developer of wind project PhongDien 1 in BinhThuan Province in Central Vietnam.

The amount of bad debt from 34 renewable energy projects can reach up to VND58 trillion, according to the BinhThuan Wind and Solar Power Association.

Of the renewable companies that mobilize funding via bonds, 24 have recorded debts of at least VND1 trillion each.

The biggest debts are recorded at Trung Nam Dak Lak 1 at VND12 trillion, followed by BB Power Holdings with VND11.5 trillion and Gia Lai Electricity at VND10.6 trillion.

These companies all have debts several times larger than their capital, up to seven times in some cases, as they have been reporting losses.

Some renewable projects were not completed by November 2021 to enjoy the incentive feed-in tariff for 20 years, while others have reported delays from EVN in paying for the electricity that it has bought.

Renewable energy ranked third in delayed bond payment as of September behind property and construction. Companies in the sector have been late in paying 25% of their bonds, according to a report by VIS Rating.