CME SOLAR SECURES USD 20 MILLION INVESTMENT FROM RESPONSABILITY CLIMATE FUNDS

Ho Chi Minh City / Zurich 15 August, 2023 — Vietnam-based solar power developer, CME Solar Investments (CME Solar), has obtained 20 million USD as long-term senior secured financing from the Swiss-based global impact investor, responsAbility. This investment represents responsAbility's most substantial commitment to climate financing to date, bringing the total investment in CME Solar to USD 32 million by 2023. The success of their initial investment two years ago, marked by CME Solar’s technical achievements and adherence to environmental and social standards, has provided a solid foundation for this continued collaboration with responsAbility.

CME Solar, established 4 years ago, is a member of the CME Group and is recognized as the rapidly advancing solar entity in the Vietnam market. The company predominantly invests in and promotes rooftop solar solutions tailored for the Commercial and Industrial (C&I) sector in Vietnam. By mid-2023, CME Solar had installed up to 100 Megawatts Peak (MWp) and has plans to add another 150 MWp in 2024. In line with its operations, CME Solar is dedicated to adhering to the environmental and social (E&S) standards, aiming to balance social welfare, economic growth, and environmental protection.

Debt financing and expansion

Following responsAbility's initial debt funding in 2021, CME Solar has consistently met its obligations to its investors. responsAbility has therefore provided an additional facility of USD 20 million in the form of long-term senior secured debt financing to be split in 2 phases (Phase 1 for USD 12.8 million and Phase 2 for USD 7.2 million). A notable project funded by this initiative is the Foxconn Solar Project in Bac Giang - Bac Ninh, Vietnam, boasting a capacity of 31.5 MWp, which is substantial enough to power approximately 40 million kWh and save up to 20,000 tons of CO2 annually. This project adopted advanced N-type PV technology throughout and emphasized Health, Safety, and Environment (HSE) standards. Completed in just three months without any environmental Incidents, the success of the Foxconn project and others in Vietnam reflects the strong partnership between responsAbility and CME Solar.

Enhancing solar initiatives across Vietnam

After this recent round of financial support, responsAbility’s total investment in CME Solar stands at around 32 million USD. This ranks as one of the most significant investments in a non-financial institution in Vietnam as of 2023. Both parties are committed to the ongoing development of solar power systems, anticipating continued environmental benefits.

Supporting Vietnam’s solar ambitions

The additional funds enable CME Solar to tackle a range of projects, primarily aimed at improving commercial and industrial (C&I) solar initiatives across a wide spectrum of sectors in Vietnam. This includes manufacturing, electronics, food, beverages, and textiles. The goal is to launch with an impressive capacity of 50 MWp. This substantial capacity not only contributes to the reduction of about 30,000 tons of CO2 annually but also allows end-users to claim around 62,000 Renewable Energy Certificates (REC). This effort, aligned with the UN's Net Zero targets, underscores the commitment to a more sustainable and eco-friendly future.

CEO’s vision for Vietnam’s solar growth

Chung Dieu Tuan, CEO of CME Solar Investments, sees a growing demand for rooftop solar installations in Vietnam, particularly within the FDI manufacturing sectors like electronics, semiconductors, garments, textiles, and global MNC consumer areas. Tuan cites government support as a driving factor for the potential expansion of rooftop solar energy in Vietnam over the next decade. He also appreciates the efforts of his team in adhering to international standards in all projects and believes CME Solar is on track to meet its targets this year.

responsAbility’s commitment to impact investing partnerships

Stefan Issler, Head of Climate Finance Direct Investments stated, "Our investment in CME Solar emphasizes our dedication to renewable energy. Drawing from our past experiences, we recognize the value of partnerships in advancing impact investing. We're confident about the potential of Vietnam's solar market, particularly with C&I consumers aiming to streamline operational costs. CME Solar has built a commendable network in Vietnam, collaborating with recognized offtakers like Foxconn and LG. Our financial backing for CME Solar aims to fill a pivotal funding need in a sector crucial for both economic and societal progression.

responsAbility Investments AG is a leading impact asset manager specializing in private market investments across three investment themes to directly contribute to the United Nations Sustainable Development Goals (SDGs): Financial Inclusion, to finance the growth of Micro & SMEs; Climate Finance, to contribute to a net zero pathway; and Sustainable Food, to sustainably feed an ever-growing population. All responsAbility investment solutions target specific measurable impact alongside market returns.  Since its inception in 2003, responsAbility has deployed over USD 13 billion in impact investments. With over 200 employees collaborating across seven offices, as of 1 March 2023 the company manages USD 4.8 billion in assets across approximately 280 portfolio companies in 74 countries. Since 2022 responsAbility is part of M&G plc, the international savings, and investments business, and contributes to enhancing M&G's capabilities in impact investing.