Singapore-based Kim Heng has been awarded a contract to install wind turbines in Vietnam.

The project marks another major milestone in the offshore engineering and vessel operator's transition into the renewable energy sector.

The company revealed that it has been able to tap green financing from a Singaporean bank to finance the assets required to undertake the work.

The turnkey lifting and installation contract has been signed with what the company described as the main contractor for Vietnam's windfarm projects, and will see wholly-owned subsidiary Kim Heng Heavy Equipment provide engineering, lifting, technical and maintenance services.

The initial term of the project is for 30 months, beginning on 12 November 2021, and is priced at $7.2m.

The duration may be extended by extra periods of three months each at a mutually agreeable rate.

Although the contract is for onshore rather than offshore work, Kim Heng said it provided a good entry point for further windfarm construction projects

"Through the entry into the contract, the group is one step closer to providing turnkey windfarm construction and installation services, expanding from its current capabilities of installing transmission cables for windfarms in Taiwan," the company said in a statement.

Green financing

Kim Heng has purchased a 1,250-tonne lift capacity crawler crane Chinese crane manufacturer SANY. The giant crane can be used to lift wind turbine components in both onshore and offshore projects. Photo: SANY

Kim Heng's move away from oil and gas towards renewable energy has been underway since 2018.

Chairman and chief executive Thomas Tan recently told TradeWinds that the company was evolving into a renewable energy-solutions provider. It wants to grab a greater share of that value chain by specialising in engineering, procurement, construction and installation support rather than just being a vessel provider.

To facilitate this shift, the company is investing in the assets it believes it will need to perform any wind energy-related contracts.

The Vietnam contract will use a 1,250-tonne lift capacity crawler crane recently acquired from Chinese crane manufacturer SANY for SGD 10m ($7.36m).

To finance the crane's purchase, Kim Heng has lined up an SGD 7.5m green loan with Singapore's United Overseas Bank. The balance was funded using internal resources.

The crane can be used for both onshore and offshore renewable windfarm projects. In the latter case, it can be mounted on a barge.