Vietnam’s private bank VPBank has signed a $27 million loan with Japanese banks to help build a high-voltage power-transmission line in southern Vietnam, part of efforts to move more renewable electricity onto the national grid.

In separate statements on Tuesday, VPBank and Japan Bank for International Cooperation (JBIC) said the money will go to the Vietnam’s national grid operator EVNNPT.

JBIC will provide $14 million, Sumitomo Mitsui Banking Corporation (SMBC) and Joyo Bank will lend the rest, and JBIC will guarantee part of their share. It is the first project drawn from a $150 million clean-energy credit line set up by VPBank and JBIC in 2024.

The money aims to help the construction of a 220-kV transmission line in the region. The power line can to raise the grid’s capacity to take in power from solar, wind, and other renewable projects in the southern region, and feed it into the national system.

The southern region of Vietnam has added renewable generation faster than its transmission network can carry it, leaving some clean power stranded when lines are congested.

Kamijo Hiroki, a VPBank deputy chief executive, said the loan reflects the bank’s role in channeling international capital into infrastructure for Vietnam’s energy transition and grid modernization.

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