AES Mong Duong 2 power plant closes finance

A consortium of two Korean government Export Credit Agencies and twelve commercial banks will provide commercial and political risk guarantees and non-recourse debt facilities for the project for over $1.46 billion.

The total cost of the project covered by debt and equity is $1.95 billion. Initial draw-down of the debt facilities for the commencement of Project construction will occur August 2011.

Comprehensive commercial guarantees and political risk cover are being provided by Korea Eximbank “KEXIM” and Korea Trade Insurance Corporation “KSURE”.   KEXIM is also the largest single provider of direct debt.

Commercial lenders include ten Mandated Lead Arrangers: BNP-Paribas, Credit Agricole, HSBC, ING, Mizuho, Natixis, SMBC, Societe Generale, Standard Chartered and Unicredit; and two Lead Arrangers: CIC Bank and DZ Bank.

The sponsors of the project are affiliates of The AES Corporation of the United States (51 per cent),    Posco Power Corporation of Korea (30 per cent) and China Investment Corporation of China (19 per cent).

Former local partner Vinacomin has exited the Project.  Turnkey EPC arrangements were entered into with Doosan Heavy Industries & Construction and its affiliates in December 2010.

The project is being implemented under Vietnam’s Build-Operate-Transfer (BOT) regulatory regime.  Mong Duong 2 is the largest private sector power project and the first coal-fired BOT project to close finance in Vietnam.

“We are thrilled to have reached this milestone with such a strong and highly committed finance consortium. The government of Vietnam has performed very well and we look forward to their further cooperation to satisfy final conditions to drawing on our debt next month.  For AES, this is the culmination of over five years of dedication and hard work to reach this goal,” said Ian Fox, AES managing director and project head.