FECON Group Breakthrough into Renewable Energy Investment

12:09:20 PM | 3/9/2023

Through 19 years of development, FECON Group has affirmed its position as an industrial and infrastructure construction contractor and a prestigious investor in foundation engineering and underground construction.

Mr. Pham Viet Khoa, President of the Board of Directors of FECON Group

In recent years, in addition to expanding investment into industrial and urban property, FECON stepped into renewable energy with a giant offshore wind power project in Ba Ria-Vung Tau province. Mr. Pham Viet Khoa, President of the Board of Directors of FECON Group, said: FECON's breakthrough into this hugely prospective field not only arouses resources to improve its corporate competitiveness but also unlocks the country’s great potential and joins hands with the Government to realize its international commitments on climate change.

From a professional foundation and underground contractor…

Known as a giant professional in foundation engineering and underground construction, FECON stepped into new markets in 2016, including international cooperation in green energy investment. The starter of this conquering journey is the 50-MWp Vinh Hao 6 Solar Farm, which cost VND1,300 billion for construction and is expected to have a power output of 83 million KWh a year. Built on 60ha in Vinh Hao commune, Tuy Phong district, Binh Thuan province, the project was kicked off in October 2018 and completed procedures for commercial operations on June 18, 2019.

Extending this outcome, FECON has gone further and deeper into the energy sector when it entered a joint venture with a foreign partner, Ecotech, to invest over VND1,420 billion in the 30-MW Quoc Vinh Soc Trang Wind Farm in the first phase. Built on 7.5ha of land, the wind power plant has six 5-MW wind turbine towers. Once in operation, the facility supplies 97.5 million kWh of electricity for the national grid a year. The official commercial operations date (COD) of Quoc Vinh Soc Trang Wind Farm was October 29, 2021.

FECON also constructed nearly 20 solar and wind power projects from 2017-2022. That laid the foundation for FECON to implement other renewable energy projects like wind power in Gia Lai and Ba Ria-Vung Tau, as well as solar power in Binh Thuan and Binh Phuoc.

….to an international cooperative energy investor

One of FECON's relatively potential ongoing projects is the 500-MW offshore wind power in Ba Ria-Vung Tau province, a cooperation contract with Corio Generation - an Australian global offshore wind power and renewable energy producer. The project, located 25-30km off the coast, is expected to be one of the giant offshore wind power projects in Vietnam. The facility is designed to generate 1,250 GWh of green electricity and reduce carbon emissions by more than 600,000 tons each year. Currently, research and development steps are underway and local consensus has been reached on the wind measurement survey. The province is seeking opinions from relevant ministries and branches for survey and project preparation. This step is behind schedule because Power Plan VIII has not been approved by the Government.

President Pham Viet Khoa said that offshore wind power is currently new to Vietnam and most domestic investors are inexperienced. Corio’s experts have rich international experience in offshore wind power development, given a series of projects in Europe, America and Asia-Pacific, including Taiwan, South Korea, Japan and Australia. FECON hopes to reinforce cooperation ties to boost the strengths of the two sides. Corio is strong in technology and finance, while FECON is strong in local resources and construction capacity.

FECON and Corio work together regularly and join each other’s administration on a monthly basis. Corio introduces some must-comply standards to Vietnamese partners like transparency, project description, management, health, safety and environmental hygiene. At the same time, Corio sends experts to train in standards towards sustainable corporate governance and development. As a market leader, Corio will positively help FECON boost its corporate strength.

FECON is confident that when the project is successful in Ba Ria-Vung Tau province, it will be a springboard for the two sides to expand to other joint investment projects. With its relationship with Corio, FECON can expand its cooperative ties with Corio's partners in the supply chain of wind power construction and development. Unlike onshore and nearshore wind power projects, offshore wind power costs more. So, to have competitive electricity prices in the Vietnamese market, the company must have solutions to reduce costs. For that reason, a stronger domestic supply chain will help reduce transport costs for domestically manufactured turbines and improve the financial performance of wind power projects. FECON has recognized and developed the necessary competencies to join the supply chain to deploy offshore wind power projects in both Vietnam and the world, including the Asia-Pacific region.

Vietnam and Australia have developed a long-term cooperation relationship and upgraded to a Strategic Partnership in 2018. The two-way trade has grown tremendously in recent years. Moreover, the synergistic impact of regional trade agreements that the two countries entered has made Vietnam an attractive investment destination and brought more investment capital to Vietnam from Australia, especially in offshore wind power.
Furthermore, given the urban development potential in Australia, Vietnamese construction companies hope that the Vietnamese and Australian governments will adopt measures to open the market and bring Vietnamese workers to Australia. At the same time, they need to have policies for jointly managing tax obligations and expanding investment opportunities for the enterprises of the two countries. The Australian government was proposed to consider mass application of minimum English requirements, which should be applied to only managerial staff, to enable construction firms and foreign contractors to access the market more conveniently.

Source: Vietnam Business Forum