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Vietnam utility places solar plant order with Japan's JGC

Deal worth around $50m to aid shift to renewable energy from coal and hydro

A solar power facility in Japan's Chiba Prefecture built by JGC

TOKYO -- A Vietnamese electricity utility company has entered a deal for Japanese plant engineering company JGC to design and build a 50-megawatt solar power generation plant, JGC's first to build such a plant overseas.

The order from Gia Lai Electricity is estimated at over 5 billion yen ($47.4 million), with the facility to be set up in Krong Pa district in southern Gia Lai Province by November.

It was Vietnam's second deal to design and build a large solar plant since the government introduced a feed-in tariff program in March 2017. Competitors for the deal included Chinese and German companies.

Vietnam currently relies mainly on coal and hydroelectric power generation. The government aims to increase the proportion of renewable energy, raising total solar power generation to 12,000MW by 2030 -- the equivalent of about 12 nuclear reactors -- from nearly zero now.

JGC is known as a leading global builder of liquefied natural gas plants. But as crude oil prices began slumping in 2014, demand for new LNG facilities has shrunk. The company now seeks to use its know-how in design, procurement and construction of solar power plants built up in its home market to meet growing demand for solar energy in Southeast Asia.

It set up a unit responsible for infrastructure deals overseas last year, and aims to win about four solar plant orders a year on average, worth an annual total of about 20 billion yen, from countries such as the Philippines, Malaysia, Indonesia and others in the region.

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