Renewable energy attracts many Singaporean investors. In the photo: GELEX wind power project invested by Sembcorp Industries

Singapore has strong interest in Vietnam

In mid-July, Levanta Renewables, a Singapore-based renewable energy company backed by Actis, announced that it was acquiring a 28.7 MWp rooftop solar project from related companies of Tien Nga Joint Stock Company, one of the leading logistics providers in Vietnam.

This is the largest rooftop solar power project in Dong Nai province, and also one of the largest rooftop solar power projects in Vietnam, with an area of ​​nearly 200,000 m2, expected to generate more than 34 GWh per year. The project will provide green energy for Vietnam Electricity (EVN).

“This acquisition is a significant milestone in the growth of Levanta Renewables in Vietnam, demonstrating our diversification efforts across the industrial, commercial and utility markets. The addition of wind and solar assets to our portfolio in Vietnam supports our goal of achieving 1.5 GW of operating capacity across Southeast Asia,” said Sudhir Nunes, CEO of Levanta Renewables.

Rahul Agrawal, Head of Energy for Southeast Asia at Actis, a global investment fund focused on sustainable infrastructure, commented that the acquisition of this rooftop solar project marks a step forward for Levanta Renewables in its ambition to reach 1.5 GW of operational capacity. In order to accelerate the energy transition in Vietnam, Levanta Renewables will provide clean, stable energy at competitive prices to commercial and industrial customers, contributing to promoting Vietnam's economic growth.

In June, Sembcorp Solar Vietnam Pte Ltd, a wholly-owned subsidiary of Sembcorp, announced the completion of the acquisition of a majority stake in three subsidiaries of the GELEX Group in the renewable energy sector. Following this transaction, Sembcorp added a total of 196 MW of operating solar and wind power capacity to its portfolio.

In addition, Sembcorp will also acquire a 73% stake in a fourth subsidiary in the GELEX system, expected in the second half of 2024. This company currently owns a 49 MW hydropower plant. After completing all four deals, Sembcorp's total renewable energy capacity in Vietnam will reach 455 MW, while the group's total renewable energy capacity globally will reach 14.4 GW.

Another Singaporean company, Great Master, is also eligible to acquire 20% of the total charter capital of Trung Khoi Joint Stock Company - an industrial park developer in Quang Tri. Meanwhile, Singapore-based Atlantic, Gulf and Pacific LNG (AG&P) has acquired 49% of the shares of Cai Mep LNG Terminal in Ba Ria - Vung Tau province.

Mr. Seck Yee Chung, managing partner, Baker McKenzie Vietnam, shared that foreign investors continue to be an important factor in the Vietnamese M&A market, largely driven by strong interest in Vietnam as a growth market. Singapore maintains its position as one of the most active investors in the Vietnamese M&A market.

According to data from the Ministry of Planning and Investment, in the first half of 2024, Singapore ranked third, after South Korea and China, among foreign investors conducting M&A activities in Vietnam, with 142 deals worth about 349 million USD.

“We believe that investors from Singapore will strengthen their portfolios by making new strategic deals in Vietnam as an emerging market in Southeast Asia,” said Mr. Seck Yee Chung.

M&A trends in the healthcare sector

With the rise of the middle class and an aging population, leading to an increasing demand for healthcare services, large deals in the healthcare sector are likely to continue in the coming time. Similarly, the real estate and construction sectors are also attractive due to the new legal framework, as well as the trend of shifting production facilities to Vietnam.

In the first half of 2024, Singapore ranked 3rd, after South Korea and China, among foreign investors conducting M&A in Vietnam.

In the context of increased production, the demand for industrial and manufacturing real estate remains very high. This is demonstrated by the deal in which Keppel Corporation Ltd. and Keppel Vietnam Fund purchased 49% of the shares of 2 adjacent housing projects in Thu Duc City from Khang Dien Group, with a total transaction value of about 138 million USD.

Another potential area is energy and infrastructure, driven by efforts to transition to renewable energy, as well as Vietnam's commitment to achieving net zero emissions by 2050 and the promulgation of the Power Development Plan VIII, Mr. Seck Yee Chung added.

Emphasizing the factors driving M&A deals by Singaporean investors, Mr. Eric Johnson, Law Firm Freshfields Bruckhaus Deringer said: “Singapore provides an important source of foreign investment in emerging markets in Southeast Asia, including Vietnam. Singapore’s main investors include sovereign wealth funds, large energy and real estate companies, as well as venture capital funds based in Singapore. In the future, Singapore will continue to account for a significant proportion of foreign investment flows into Vietnam, as Singaporean companies and investment funds seek new growth opportunities in this market.”

According to Mr. Johnson, thanks to Singapore's position as a regional financial center as well as the efficiency and predictability of its Common Law legal system and treaty network, many companies from the US, Europe, Japan, as well as global private equity funds have invested in Vietnam through subsidiaries in Singapore or special purpose companies.

“Emerging technology companies in need of capital will set up a parent company in Singapore to facilitate efficient overseas capital raising from venture capitalists,” Johnson added.