Banks have experienced a significant bad debt formation while implementing strict provisioning to control non-performing loans amid pandemic struggles – however, debt restructuring portfolios will slightly increase in 2021 as related conditions are expanded.
Higher risk of default from solar power investment 09:12 | 16/03/2021
Higher risk of default from solar power investment
With high expectations for escalating profit margin rates and multiple tax incentives, scores of firms have rushed into solar power project investments in the past few years. These companies commonly use high financial leverage tools as up to 70-80 per cent of their capital sources come from loans and enterprise bonds.
According to a recent report by SSI Research, the bond value mobilised for solar power projects climbed to VND29.9 trillion ($1.3 billion) in 2020, a 254 per cent jump on-year.
In terms of credit sources, by the end of 2020, banks had poured VND84 trillion ($3.65 billion) into renewable energies, mostly lending to solar power projects.