Credit pact inked for Mong Duong 2 power plant

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SaigonTimes English - 43 month(s) ago 9 readings

HANOI – The Government and a consortium of foreign creditors inked a billion-dollar pact on Thursday to finance the long-awaited power plant Mong Duong 2 in Quang Ninh Province.

By Tu Hoang - The Saigon Times Daily

HANOI – The Government and a consortium of foreign creditors inked a billion-dollar pact on Thursday to finance the long-awaited power plant Mong Duong 2 in Quang Ninh Province.

Financing documentation for the 1,240 megawatt, coal-fired power project was formally executed on Thursday in Hanoi to set a milestone in attracting foreign funds for the power sector, said Deputy Minister of Industry and Trade Hoang Quoc Vuong.

“The pact has set a milestone in attracting foreign loans in the power sector which is in severe shortage for the country’s economic development,” he told the signing ceremony.

The consortium is comprised of two Korean export credit agencies and 12 commercial banks, which will provide commercial and political risk guarantees and non-recourse debt facilities for the project for over US$1.46 billion.

The total cost of the project covered by debt and equity is US$1.95 billion. Initial draw-down of the debt facilities for the commencement of project construction will begin next month.

Comprehensive commercial guarantees and political risk cover are being provided by Korea Eximbank and Korea Trade Insurance Corporation, with the former being the largest single provider of direct debt.

Commercial lenders include BNP-Paribas, Credit Agricole, HSBC, ING, Mizuho, Natixis, SMBC, Societe Generale, Standard Chartered and Unicredit among others.

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

Ian Fox, AES Managing Director and Project Head, remarked: “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,” he added.

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