Shikoku Electric Power Co., Inc. from Japan has completed the purchase of a 15 per cent stake in Vung Ang II thermal power plant from Mitsubishi Corporation for $87 million, despite the global trend to move away from coal.
|Vung Ang II thermal power plant will provide important energy to maintain Vietnam's development |
After the deal, Mitsubishi holds a 25 per cent stake in the project while another Japanese utility, Chugoku Electric Power Co., Inc., owns 20 per cent and Korea Electric Power Corporation holds the remaining 40 per cent.
This move is a part of Shikoku’s plan to expand operations overseas to boost growth. Shikoku Electric currently has a charter capital of $170 billion.
“We received varied opinions from this decision, we still decided to invest in the project because the generation of 1.2GW of power will help ensure a stable power supply for Vietnam’s economic development,” the representative of Shikoku Electric said.
Located in the central province of Ha Tinh, Vung Ang II thermal power plant is invested by Vung Ang II Thermal Power LLC (VAPCO), which is a 100 per cent foreign-owned company.
In December 2020, the Japan Bank for International Cooperation signed a loan agreement with VAPCO to finance a loan worth $636 million for the project, under the bank's Growth Investment Facility.
The loan is co-financed with private financial institutions as well as the Export-Import Bank of Korea. The total co-financing amount is approximately $1.77 billion.
To date, the investor completed the procedures for the preparation process, including signing a build-operate-transfer contract, power purchase agreement, and government guarantees and undertakings for the project.