South Korean tech giant Samsung's Vietnamese subsidiary, Samsung Electronics Vietnam Thai Nguyen (SEVT), has signed its first direct Power Purchase Agreement (PPA) in the country.

Under the terms of the deal, SEVT will offtake 70GWh of solar power from the Duc Hue 2 Solar Power Plant, a 49MW solar array in Tay Ninh Province, to the west of Ho Chi Minh City. The power will be delivered via the grid. The project was developed by TTC Duc Hue and reached commercial operations in 2019. The project is currently owned by TTC-Duc and Gia Lai Hydropower Joint Stock.

“Through this inaugural DPPA, we hope to contribute to the growth of Vietnam’s renewable energy market while actively supporting global efforts to address the climate change crisis,” said Mr. Na Ki Hong, general director of Samsung Vietnam.

Vietnam is becoming a key hub for Samsung. Late last month, the company announced plans to invest $1.5 billion to build a semiconductor testing plant in Vietnam in an effort to ease the global memory chip shortage.

In addition, the month before, reports emerged that the company was planning to invest $4bn in a chip packaging factory in Thai Nguyen province in northern Vietnam, to be developed in multiple phases. Samsung is the largest foreign investor in Vietnam, having invested more than $23bn in the country to date, according to the government.

Samsung has signed several renewable energy agreements to decarbonize its operations. According to the company, it has achieved a 93.4 percent transition to renewable energy across its operations. The company also has a robust renewable construction portfolio, with more than 50 renewable and storage projects under development globally, with planned active capacities exceeding 9GW. The PPA in Vietnam is one of the first instances of the firm contracting for power via a PPA.