The Asian Development Bank (ADB) on October 9 signed a loan agreement worth US$186 million for a solar power project in Vietnam, marking it the country’s first certified green loan.

The project, which is one of the largest in Southeast Asia, is expected to reduce 120,000 tons of carbon dioxide annually

Funded by the Japan International Cooperation Agency (JICA) that utilizes the “Leading Asia's Private Infrastructure Fund” (LEAP), the syndicated loan is the first green B loan in the Asia-Pacific to be certified under an international certification scheme by the Climate Bonds Initiative.

The loan enables the investors who are Thai B.Grimm Power Public Company Limited and Vietnam's Truong Thanh Vietnam Group JSC (TTVN) to develop a 257-megawatt so power farm in Vietnam’s central province of Phu Yen, the largest single operating solar power plant in Vietnam and one of the biggest in Southeast Asia, according to JICA.

Provided by ADB and commercial banks including Bangkok Bank, Kasikorn Bank, Kiatnakin Bank, Industrial and Commercial Bank of China, and Standard Chartered Bank, the project aims to reduce dependence on coal and diesel fuel while promoting the utilization of clean domestic energy resources.

It is expected to meet increasing power demand in tourist areas such as Quang Ngai province and Nha Trang city, which are located near the project site, and reduce carbon dioxide emissions by 123,000 tons per year, JICA said in a press release.

The project will support the rapid development of solar power capacity in Vietnam, advancing the country’s green growth strategy that promotes the process of restructuring and improving economic institutions towards more efficient use of natural resources.

The project is part of JICA’s broad support to promote quality infrastructure investment and contribute to social and economic development in developing countries based on the Sustainable Development Goals (SDGs).

Vietnam has planned to tap its solar potential which is around 13.5 gigawatt (GW) in the next decade starting from 2020.