Vietnam: Foxconn's 1GW Renewable Energy Deal with Brookfield

Foxconn and Brookfield have announced a partnership to develop up to 1GW of renewable energy capacity in Vietnam. The deal combines wind, solar and large-scale batteries.

The arrangement takes the form of long-term power purchase agreements, or PPAs.

According to the World Economic Forum, manufacturing produces around 20% of carbon emissions globally.

The US Government estimates that manufacturing uses 54% of global energy consumption.

More than half of the world's manufacturing takes place in Asia, according to the United Nations, and Vietnam's place in this is growing.

Brookfield's transition fund

Brookfield will deploy investment through its Catalytic Transition Fund. This fund was designed to direct private finance into clean energy projects in emerging markets.

It has backing of US$1bn of catalytic capital from ALTÉRRA and was structured to attract additional private investment by improving risk-adjusted returns in markets that have historically been harder to finance.

Daniel Cheng, Head of Energy for Asia-Pacific at Brookfield, says: "Brookfield's partnership with Foxconn underscores the scale of corporate demand for renewable power in Vietnam, one of Asia's fastest-growing economies.

"As global manufacturers increasingly turn to renewables for its cost-competitiveness, speed to market and energy security benefits, we're seeing strong and rising demand for long-term supply from across the region."

Daniel pointed to policy developments in Southeast Asia as a secondary factor.

Supply chain partners

The partnership extends beyond Foxconn's own operations, covering both the company's Vietnamese operations and its broader supplier network in the country.

This approach differs from typical corporate PPA structures that usually focus on a single buyer's energy needs.

James Tu, Chief Investment Officer at Foxconn, says: "We are pleased to be a strategic partner to Brookfield to secure long-term access to renewable energy for our operations and supply chain in Vietnam.

"This initiative where we're investing and managing alongside Brookfield ensures stable and cost-effective power supply for our continued growth in the region."

The structure could provide energy access to companies in Foxconn's supply network.

Vietnam's electricity system has faced capacity pressures in recent years. The country's ability to attract structured, long-term investment of this kind could indicate how its energy transition is progressing at an industrial scale.

Brookfield describes the deal as an addition to what it calls one of the world's largest renewable energy portfolios. This spans hydro, wind, solar and storage across five continents.