Major power plant sources funding

PetroVietnam is still searching for additional funds to finish the construction of the Thai Binh 2 power plant

“Further financial arrangements are vital for the Vietnam National Oil and Gas Group (PetroVietnam) to finish construction of this project and fulfil its commitment to develop Vietnam’s energy industry,” said PetroVietnam CEO Nguyen Van Hau at the ceremony last week to sign a credit agreement for $795 million.

The finance was sourced from different loans based on an export credit agreement (ECA) worth $330 million from the Export-Import Bank of Korea (KEXIM), a commercial loan agreement insured by KEXIM worth $270 million and a foreign commercial loan agreement worth more than $195 million.

An international all-star cast of banks including the Bank of Tokyo Mitsubishi UFJ (BTMU), Citibank, Mizuho Corporate Bank, the Hong Kong and Shanghai Banking Corporation (HSBC), the Oversea-Chinese Banking Corp Ltd (OCBC), Chinese Development Bank (CDB), Standard Chartered and the Saigon Commercial Bank all played their part in concluding the funding.

“All of the banks are PetroVietnam’s long term partners that have co-financed many of our projects in the past,” said Hau.

The loans aim to help PetroVietnam purchase generators, boilers and auxiliary equipment provided by Sojitz-Daelim contractors and complete construction work for the Thai Binh 2 power plant.

In August this year PetroVietnam also signed an export credit agreement worth $141 million with Japan’s Bank for International Co-operation and other banks for the project.

PetroVietnam however, will still need to find additional funds to finish its arrangement for the construction of this important plant. According to Deputy Minister of Industry and Trade Ho Thi Kim Thoa such needed loans would need to be agreed in the very near future to ensure the project was completed on time.

The Thai Binh 2 power plant, located in Thai Thuy commune in the Red River Delta province of Thai Binh, consists of two generation units with a total capacity of 1,200 MW. This plant shares the Thai Binh Power Complex with the state-run Electricity of Vietnam’s 600MW Thai Binh 1 plant.

Construction on the $1.65 billion project began in 2011.   The facility is scheduled to be put into operation in late 2014 and to supply approximately 7.2 billion kWh per year to the national grid, contributing to increasing PetroVietnam’s electricity generation capacity to 9,200 megawatts, accounting for 22 per cent of the country’s total thermal power generation capacity and about 20-25 per cent market share of the national electricity supply.

 PetroVietnam is also investing in a range of other large scale power plants nationwide, such as Vung Ang 1, Long Phu 1, Song Hau 1 and Quang Trach 1 power plants.