HSBC exits Vinh Tan 3 thermal power project

January 28, 2020 | 23:19

(0) user say

The fate of the 1,980MW Vinh Tan 3 coal-fired power plant, located in the southern central province of Binh Thuan, has become uncertain now that the London-headquartered HSBC announced withdrawing as the financial advisor for the project.

hsbc exits vinh tan 3 thermal power project

HSBC declines any involvement in Vinh Tan 3 thermal power project, adding to the ranks of financial institutions refusing to fund environmentally damaging power projects (Illustration image)

One of the world’s largest financial groups, HSBC, has pulled out of a major coal project in Vietnam, marking the latest move by an international bank to go cold on funding the biggest source of climate-changing greenhouse gas emissions, according to newswire eco-business.com.

HSBC was appointed as financial advisor to the $2 billion Vinh Tan 3 project in 2014, but a few days ago, the bank announced that it is no longer involved in the project.

The announcement was made in response to an opinion editorial headlined “HSBC lags as finance cleans up on Asian energy”, written for Asia Times by Munira Chowdhury, an analyst for Australia-based finance pressure group Market Forces.

The story was updated, with the footnote from Asia Times stating that HSBC had told the publication that it has “no involvement at all in the Vinh Tan 3 project – including as financial adviser, funding arranger or prospective lender.”

HSBC’s cancellation marks the latest move by a major international lender to ease off on bankrolling fossil fuel in Asia.

Julien Vincent, executive director for Market Forces, said, “It says a lot about how unpopular polluting coal is becoming when even HSBC, which cynically excluded Vietnam, Indonesia, and Bangladesh from their no new coal power policy, can’t get a deal like this over the line."

“HSBC has a lot of catching up to do with its climate-friendly lending policies. If it wants to avoid more reputational damage, HSBC should at a minimum rule out any investments that help enable the expansion of the fossil fuel industry,” he added.

The Vinh Tan 3 thermal power plant, which has three turbines with the total installed capacity of 1,980MW, is the largest coal-fired thermal power facility at the Vinh Tan thermal power centre in Binh Thuan.

In 2009, Vinh Tan 3 Energy JSC (VTEC) was established by the Electricity of Vietnam (EVN), One Energy Ventures Limited, and Pacific Corporation. The shareholders hold 29, 49, and 22 per cent in the enterprise, respectively.

In 2010, the government assigned the project to be developed under the build, operate, transfer (BOT) model. China’s Harbin Electric International Company was named the contractor of the project with the contract valuation of $1.14 billion. The first turbine was expected to be connected to the national grid in 2018.

By Kim Oanh

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional