CDB, ICBC, and BoC provide $1 billion syndicated loan for 1245MW Duyen Hai 3 Coal-Fired Power Plant Construction Project (Linked to Project ID#65148, #65791, #72770)

In 2012, China Development Bank (CDB), Industrial and Commercial Bank of China (ICBC), and the Sichuan and Ho Chi Minh City branches of Bank of China (BoC) signed a $1,000,898,001 billion syndicated buyer’s credit loan (BCL) agreement with Vietnam Electricity (EVN) — a state-owned company — for the 1245MW Duyen Hai 3 Coal-Fired Power Plant Construction Project. The borrowing terms of the loan are unknown. Sinosure provided export buyer’s credit insurance for this syndicated BCL. The total cost of the Independent Power Project (IPP) was $1.5 billion and it was financed with a mix of debt and equity. The borrower used the syndicated BCL proceeds to finance 85% a $1,177,527,060 EPC contract signed in August 2011 with a consortium of companies including: China Chengda Engineering Co. Ltd, Dongfang Electric Corporation (DEC), the Southwest Electric Power Design Institute (SWEPDI), and Zhejiang Electric Power Construction (ZEPC). The remaining 15% was financed by EVN counterpart funding. The purpose of the project was to construct a 1245MW coal-fired power plant — with two, 622.5MW power generation units (Unit 1 and Unit 2) — in Dan Thanh commune, Duyên Hải district, and Trà Vinh province. Initial project preparation work took place in September 2010. The project officially commenced on December 8, 2012. Unit 1 and Unit 2 were originally scheduled for completion in Q4 of 2015 and Q2 of 2016, respectively. However, Unit 1 and Unit 2 were ultimately completed on January 15, 2017 and April 14, 2017, respectively. In August 2018, an audit report on the Duyên Hải-3 power plant found that EVN had underestimated the project's cost by 8.8 billion Vietnamese Dong (VND). EVN did not fully withdraw the committed loan value of the foreign loan contracts so they had to work with Sinorsure to recover $2.9 million. By April 2018, at the time of the audit, EVN had not worked with the insurance unit Sinosure to recover the amount of $2.9 million corresponding to the undisbursed amount of $37.8 million in the credit contract to save the investment cost of the project.

Additional details

1. This project is also known as the 2x622 MW Duyen Hai 3 Thermal Power Plant Project, the Duyên Hải-3 (2 x 622.5 MW) Project, and the 1245 MW Duyen Hai 3 Thermal Power Plant Project. The Chinese project title is 越南沿海三期燃煤电站项目 or 越南沿海火电项目. The Vietnamese project title is Duyên Hải-3 or Nhà máy Nhiệt điện Duyên Hải 3. 2. Southwest Electric Power Design Institute (SWEPDI) is a subsidiary of the China Energy Engineering Group. 3. According to the Boston University (BU) China's Overseas Development Finance Dashboard, this syndicated loan is worth $1 billion. AidData derived the exact transaction amount ($1,000,898,001) by multiplying the exact EPC contract amount ($1,177,527,060) by 0.85 since this syndicated BCL covered 85% of the EPC contract (see EVN press release in source #85202). 4. China Eximbank, ICBC, Bank of China, and CDB also contributed to the Duyen Hai 1 Coal-Fired Power Plant Construction Project and the Duyen Hai 2 Coal-Fired Power Plant Construction Project (as captured via Project ID#65148, #65791, and #72770).

Number of official sources

10

Number of total sources

20