Japanese utility company JERA, through its subsidiary JERA Asia, has agreed to purchase a 35.1% stake in Vietnam-based renewable energy firm Gia Lai Electricity (GEC).

JERA will acquire the stake from International Finance Corporation (IFC) and Armstrong South East Asia Clean Energy Fund for an undisclosed sum.

An affiliate of TTC Group, GEC has a renewable portfolio with nearly 600MW of capacity, which includes hydro, solar and wind power projects.

JERA Asia CEO Toshiro Kudama said: “Since our investment in Phu My 2.2 in 2005, we have viewed Vietnam as an important market in ASEAN and have sought opportunities to strengthen ties between our two countries.

“As one of Japan’s leading energy companies, our objectives are to contribute to both economic growth and decarbonisation across Asia, and this investment represents another milestone in this effort.

“As a shareholder in GEC, we will support GEC’s expansion of renewables in Vietnam.”

GEC intends to expand its power generation portfolio to 1.7GW by 2025 to meet Vietnam’s rising electricity demand and decarbonisation goals.

JERA recently published its new corporate vision for 2035, under which it aims to increase its renewable energy platform and low-greenhouse-gas thermal power.

Earlier this year, the company began full-scale operations of its Vietnamese subsidiary, JERA Energy Vietnam, which will serve as its base of operations in the country.

In February, JERA reached heads of agreement with West Holdings Corporation to build at least 1GW of solar power capacity in Japan within the next five years.

The two companies plan to combine their expertise to expedite solar power generation in the country, enhance their renewable energy businesses and work towards a decarbonised society.

In addition, JERA continues to work to reduce its carbon emissions from thermal power generation by promoting hydrogen and ammonia co-firing.