In discussion with Stephen Gunnion, Michael Carrington, the managing director of Renewables at Coro Energy PLC (AIM:CORO), shares insights into the company's latest venture into rooftop solar power in Vietnam.
This interview sheds light on the strategic debt finance agreement with HDX Bank, the pilot project with Mobile World Investment Corporation, and the future aspirations of Coro Energy in the renewable energy sector, both in Vietnam and globally.
Stephen Gunnion (SG): Michael, it's great to have you with us. Let's dive straight into the details of this exciting debt finance offer you've received for rolling out rooftop solar in Vietnam. Can you shed more light on this, especially your plans with Mobile World Investment Corp?
Michael Carrington (MC): Thank you, Stephen. We're indeed excited about this opportunity. Mobile World Group presents us with the potential to install up to 50 megawatts of rooftop solar across 900 locations in Vietnam. Debt finance, particularly from HDX Bank, is a crucial component of this project. They are a local Vietnamese bank with substantial experience in financing rooftop solar projects. Our collaboration forms a solid triangle of partnership with ourselves, MWG, and HDX Bank, which is pivotal for the high level of funding we're discussing.
SG: Could you elaborate on the pilot stage of this project and your approach to it?
MC: Certainly. We're adopting a prudent and responsible strategy, starting with a pilot project across 10 sites, costing just under $300,000. HDX Bank has committed to providing 50% of the debt finance for this pilot. After we evaluate its success and ensure everything is functioning as planned, we aim to gradually expand this to achieve our 50 megawatt target in a controlled manner.
SG: With debt finance covering only half of the necessary capital, where will the rest come from?
MC: We're exploring various options and discussing with other partners to secure the remaining funding needed for the rollout. Once the pilot is in place and we have tangible data for analysis, it will likely enhance confidence among potential investors in our activities.
SG: How does the deal structure work with Mobile World Investments? Could you explain the dynamics of the solar installation and power sales?
MC: Sure. We install the solar panels and then sell the power back to MWG under a 14-year contract. Despite being relatively short, this fits well with our business model. Thanks to Vietnam's tiered electricity pricing system, we anticipate attractive returns on investment. The commercial sector, where MWG fits in, is particularly profitable. However, managing so many locations does bring its own challenges, but we've fine-tuned our approach in the pilot to ensure maximum efficiency.
SG: Finally, what else can we expect from Coro Energy in 2024?
MC: 2024 is shaping up to be an exciting year for us. Beyond Vietnam, where we aim to achieve 150 megawatts as quickly as possible, we're also engaging in early-stage discussions with potential clients in other regions like the Philippines. We've recently begun a wind data campaign there, which will support more than one project. So, we're looking forward to a year of significant progress and value delivery for our shareholders.