China Eximbank provides $99.8 million loan for Phase 1 of Dung Quat Shipyard Project

In October 2004, China Eximbank and Vietnam Shipbuilding Industry Corporation (Vinashin or Tổng công ty Công nghiệp Tàu thuỷ Việt Nam) — a state-owned shipbuilding firm in Vietnam — signed a $99.8 million loan agreement for Phase 1 of the Dung Quat Shipyard Project. The borrowing terms of the loan are unknown. The proceeds of the loan were used to finance 100% of the EPC contract with Yunnan Machinery Import & Export Corporation (YMIEC). The purpose of the project was to construct a 120,000 square meter shipyard in Binh Chau Village, Binh Son District, and Quang Ngai Province within the Dung Quat Economic Zone (DQEZ). YMIEC and Shanghai Huayuan Investment & Development Co. were the implementing contractors. A formal groundbreaking ceremony took place on January 23, 2003. The project was originally scheduled for completion within 33 months (October 2007). Upon completion in 2008, the shipyard was capable of building vessels with 300,000 deadweight tons (DWT) and repairing 600,000-DWT ships. As of August 2017, the shipyard was operating at a loss.

Additional details

1. The Chinese project title is 越南中部广义省同关造船厂. The Vietnamese project title is Đóng tàu Dũng Quất or Dự án Nhà máy Đóng tàu Dung Quất giai đoạn I or Dự án Nhà máy Đóng tàu Dung Quất. 2. Several media reports claim that this loan is concessional in nature but no official sources confirm this point. This issue warrants further investigation. 3. It is unclear whether China Eximbank ever signed a final financing agreement for Phase 2. This issue warrants further investigation. 4. The China Eximbank loan that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020. 5. On October 22, 2008, the Chinese Government and Government of Vietnam signed a loan framework agreement pledging China Eximbank financing for unspecified projects. On September 16, 2009, the Vietnamese Deputy Prime Minister signed an official letter (1626/TTg-KTTH) including Phase 1 of Dung Quat Shipyard Project in the list of projects to be financed by the 2008 framework agreement.

Number of official sources

4

Number of total sources

20