Astris as financial advisor to JERA Co. Inc. (“JERA”), Japan’s largest power generation company, in relation to its acquisition of a 35.1% stake in Gia Lai Electricity JSC (“GEC”, HOSE:GEG), the energy development arm of prominent Vietnamese conglomerate TTC Group. JERA acquired the stake via a full buy-out of the GEC shares previously held by International Finance Corporation (“IFC”) and AVH Pte. Ltd (“AVH”), the investment vehicle of Armstrong S.E. Asia Clean Energy Fund Pte. Ltd. The transaction cleared local regulatory approvals and reached closing in December 2022. For this mandate, Astris teamed up with Viet Capital Securities JSC, Vietnam’s leading independent investment banking firm.
GEC’s platform consists of a mix of run-of-the-river hydro, solar, and wind assets in various stages of development and operation:
500+ MW operational capacity, including ca. 300 MW solar assets and ca. 150 MW wind assets; and
1.5+ GW of development pipeline comprised largely of utility-scale wind and solar plants, as well as rooftop solar systems.
As Japan’s largest power generation company, JERA boasts ca. 77 GW of domestic and overseas power generation capacity (including projects under construction), responsible for approximately a third of the total nationwide power generation in Japan.
JERA’s corporate vision for 2035 is “to scale up its clean energy platform of renewables and low greenhouse gas thermal power, sparking sustainable development in Asia and around the world.” GEC’s portfolio is expected to contribute meaningfully to this goal and aid with JERA’s targeted expansion in Vietnam as a priority market. To this end, JERA also announced in March2022 the start of the full-scale operation of its Vietnam subsidiary, JERA Energy Vietnam Co., Ltd., to serve as its base for operations in the country.
In a press release regarding the transaction, JERA Asia CEO Toshiro Kudama said, “Since our investment in Phu My 2.2 in 2005, we have viewed Vietnam as an important market in ASEAN and have sought opportunities to strengthen ties between our two countries. As one of Japan’s leading energy companies, our objectives are to contribute to both economic growth and decarbonization across Asia, and this investment represents another milestone in this effort. As a shareholder in GEC, we will support GEC’s expansion of renewables in Vietnam.”
Hugo Virag, Co-Head of Astris Finance’s operations in Southeast Asia, said: “We thank the JERA Tokyo and JERA Singapore teams for their confidence in Astris Finance’s capacity to help JERA complete its first investment in the Vietnamese renewable energy market. We are very pleased with the outcome of this intense M&A process leading to the closing of a rare and complex acquisition by a foreign investor on the Ho Chi Minh City stock exchange. We are hopeful that this transaction has brought about a well-balanced joint-venture between JERA and the controlling shareholder TTC Group.”
Fabrice Henry, CEO of Astris Finance, added: “At the COP27 meeting in November 2022, Vietnam reaffirmed its ambition to be at the forefront of energy transition. Under the latest draft of the country’s energy sector development plan (known as the PDP8), the country is looking to boost its installed renewable energy capacity from [16] GW currently to [30] GW by 2030. This will require the mobilization of significant capital and the injection of cutting-edge technology, notably to accelerate offshore wind development. We expect the TTC-JERA joint venture in GEC to play an instrumental role in this plan, and to be of strong mutual benefit to the two partners.
This is the fourteenth M&A transaction closed by Astris in the global renewable space in the past twelve months, and the third in Southeast Asia in the past 18 months.