Japan Bank for International Cooperation (JBIC) has signed a loan agreement totalling ¥7.7bn with Electricity of Vietnam (EVN), with a guarantee provided by the government of Vietnam.
The loan was cofinanced with Mizuho Corporate Bank (agent bank) and Soci&eaute;té Générale, Tokyo branch.
This loan will finance a project where Hai Phong Thermal Power, in which EVN has an 87.5% equity stake, builds a coal-fired thermal power plant with a capacity of 600MW (300 W x 2 generating unit) in Hai Phong, northern Vietnam.
The loan will support the export of power generation facilities from Marubeni Corporation, the Japanese exporter, to Hai Phong TP by providing a loan to EVN.
Since adopting the doi moi policy in 1986, Vietnam has experienced a sharp increase in power demand in tandem with fast economic growth (an average annual growth of about 10-15%).
In particular, a widespread blackout occurred in the northern region in May 2005, when the power system could not withstand surging power demand. Thus tight power supply is an urgent issue to address in the country’s power sector. Under these circumstances, the construction of a coal-fired power plant under this project will not only help national economic development through securing a stable supply of power but also support business activities of a number of Japanese affiliates operating in Vietnam.
This loan is the first export loan to EVN that plays a central role in the country’s power sector. JBIC is committed to supporting Japanese firms receiving orders and further expansion of trade between Vietnam and Japan.