A syndicate of Japanese banks has extended an export loan to the Vietnam Oil and Gas Group (Petrovietnam).

The US$141mn buyer’s credit comes in two tranches. The Japan Bank for International Co-operation (the export credit agency) has contributed US$85mn from its own book. The commercial portion has been arranged by the Bank of Tokyo-Mitsubishi UFJ, with finance also coming from Mizuho and Citibank Japan. The commercial tranche is covered by Nippon Export and Investment insurance (Nexi).

The borrower will use the finance to purchase steam turbines and related machinery from a Korean and Japanese consortium made up of Sojitz Corporation and Daelim Industrial. The equipment will be used in a coal-fired thermal power plant in the Thai Binh province in northern Vietnam.

The 1,200MW plant has been the subject of intense speculation this year. US Exim, the American ECA, had considered providing funds for the project, but decided to pull out after President Obama encouraged government bodies to stop funding overseas coal-fired plants “unless they deploy carbon-capture technologies or there’s no viable way for the poorest countries to generate electricity”.