The venture capital arm of UOB is going green.
UOB Venture Management is investing US$25 million (S$34 million) in Bitexco Power Corp, one of Vietnam's largest privately- owned hydropower companies.
Financial services group Orix is also making a US$25 million investment in the firm.
Bitexco Power owns and operates 18 hydropower plants in Vietnam. The plants can generate a total of 3,500 gigawatt-hours of energy a year, enough to provide electricity for 2.7 million people.
"Hydropower is one of the most cost-efficient sources of electricity generation, and we believe Vietnam's growth will continue to drive the demand for renewable energy," said Mr Seah Kian Wee, managing director of UOB Venture Management, which manages about $1 billion of funds.
"By investing in Bitexco Power, we hope to participate in the growth of the power sector and play a role in the country's economic transformation."
Vietnam's rapid economic growth has seen a surge in demand for electricity.
Demand will expand at between 10 per cent and 12 per cent a year until 2030, according to the General Statistics Office of Vietnam. To help meet that demand, the government has liberalised the industry and is wooing investment from the private sector.
Orix corporate executive vice- president Yuichi Nishigori said Vietnam's power sector shows strong growth potential, adding: "We believe Bitexco Power is in the best position to benefit from the... ongoing reform of the electricity market, underpinned by the rising demand for electricity."
The new capital will be channelled towards Bitexco Power's business expansion as it moves to consolidate its leadership position in the renewable energy sector.