HA NOI — The US-invested developer of the US$2.1-billion Mong Duong 2 Thermal Power Plant in northern Quang Ninh Province signed here yesterday an adjusted build-operate-transfer (BOT) contract with the Ministry of Industry and Trade.
“The re-signing of the contract which was first signed on April 22, 2010, is due to a change of investors,” said Hoang Quoc Vuong, deputy minister of industry and trade.
Under the earlier contract, the developer was the Mong Duong AES-TKV, a joint venture of American Electric Supply Inc (AES) and the Vietnamese State-owned mining giant, the Viet Nam National Coal and Mineral Group (Vinacomin).
However, Vinacomin exited the project in March to focus on other power plants.
Now, the sponsors of the project are affiliates of the AES (51 per cent), Posco Power Corporation of Republic of Korea (30 per cent) and China Investment Corporation of China (19 per cent).
“The contract signed yesterday marked success in improving the investment environment as well as attracting foreign investors to large power projects in Viet Nam,” Vuong said.
“The Mong Duong 2 power project represents an important addition to Viet Nam’s energy production. With this, Viet Nam has taken an important step toward meeting its energy challenges,” said Jessica Webster, economic Counsellor at the US Embassy.
“As the largest US investment to date in Viet Nam’s energy sector, this project is yet another sign of the growing co-operation and economic ties between the US and Viet Nam. It also shows the positive contribution that Public Private Partnerships and a strong investment environment can have in Viet Nam’s overall development strategy.”
Ian Fox, AES general director and head of the Mong Duong 2 project, said the AES on July 11 officially announced that financial sources for the Mong Duong 2 project had been formally completed.
He said a consortium of two South Korean government Export Credit Agencies and 12 commercial banks would provide commercial and political risk guarantees and debt facilities for the project for more than $1.46 billion.
The total cost of the project covered by debt and equity is $1.95 billion. The capital is expected to be disbursed for the first time in August.
The comprehensive guarantees for commercial and political risk are being provided by Korea Eximbank (KEXIM) and Korea Trade Insurance Corporation (KSURE). KEXIM is also the largest single lender.
Commercial lenders include BNP-Paribas, Credit Agricole, HSBC, ING, Mizuho, Natixis, SMBC, Societe Generale, Standard Chartered, Unicredit, CIC Bank and DZ Bank.
The project is being implemented under Viet Nam’s Build-Operate-Transfer (BOT) regulatory regime. The Mong Duong 2 is the largest private sector power project in Viet Nam.
The project will have an estimated capacity of 1,200MW and an annual output of 8.1 billion kWh when it becomes operational in 2015. — VNS