Despite concerns about the feasibility of Chinese JA Solar’s solar cell production project in the northern province of Bac Giang, the investor has committed to increasing the investment capital to $450 million, $130 million higher than the initially sum.
According to information published on Kinh Bac City Development Holding Corporation (HoSE: KBC)’s website, on September 14, KBC and JA Solar signed an agreement to jointly develop the solar cell plant. The agreement was made during the visit of Prime Minister Nguyen Xuan Phuc and a Vietnamese business delegation to China.
Earlier in July, the two parties signed a land lease contract handing over an 88-hectare land area in Bac Giang province’s Quang Chau Industrial Park to JA Solar to implement the project with a total investment of over $1 billion.
According to the latest agreement, the construction will be divided into numerous phases. The first phase will cover an area of 40 hectares with a total investment capital of $450 million.
Established in 2005, JA Solar is the fourth largest solar cell producer in the world. It currently has eight plants in Europe, the Latin America, and Japan. In 2015, the group earned $2.15 billion in revenue.
JA Solar’s project has a large-scale, however, it has raised concerns over its feasibility in the context of numerous foreign investors’ empty promises in this sector.
In January 2011, Ho Chi Minh City Industrial and Export Processing Zones Management Authority (Hepza) granted an investment certificate to First Solar Vietnam Manufacturing Co., Ltd., a subsidiary of US-based First Solar Technology Group, to develop a factory producing thin-film solar power panels and semi-finished products.
The 44.2-hectare factory has a total investment capital of $1.2 billion, with a designed capacity of up to 1,080MW per year. The operational time of the whole project is 50 years.
The first phase’s construction was kicked off in March 2011 and is expected to be completed within 19 months. However, the construction was suspended after a mere eight months due to the supply-demand imbalance on the world solar market.
In July 2012, First Solar Group announced plans to sell its factory and leave Vietnam. Earlier in February 2012, the American company completed the evaluation and approved a set of initiatives to increase manufacturing capacity, among others, primarily intended to adjust its previously planned expansions and global manufacturing footprint.
In April, a representative of Hepza said that a new investor may put forward at least $500 million to the project. However, the name of the new investor and the project’s date have yet to be disclosed.
Along with First Solar’s project, in January 2013, Global Sphere and WorldTech Transfer Investment held the ground-breaking ceremony of their $300-million solar cell production plant in Phong Dien Industrial Park in the central province of Thua Thien-Hue province. The construction was be divided into two phases. It was scheduled to start in late 2013 and to start production in May 2015. However, in October 2015, Global Sphere announced to withdraw from the project.
Another example of a failed solar cell project is the $390 million investment of IC Energy in Chu Lai Open Economic Zone in the central province of Quang Nam. The construction, which was kicked off in May 2011, was expected to go live with its first 30MW manufacturing line in late 2011. The project would then become fully operational by the end of 2015. In 2012, the investor proposed the authorities to extend the deadline due to difficulties in product consumption. As of now, the construction has yet to be resumed.