Chinese banks pledge to provide USD 1.6 billion syndicated loan for 1200 MW MW Quynh Lap 1 Power Plant Construction Project

Project narrative

In March 2009, Nghệ An provincial authorities approved a plan by state-owned enterprise Vietnam National Coal-Mineral Industry (Vinacomin) to implement the 1200 MW Quynh Lap 1 Power Plant Construction Project. However, as years passed, Vinacomin proved unable to finance the project. So, in June 2018, the Viet Nam Ministry of Industry and Trade proposed that Geleximco-HUI (a joint venture between Hanoi Export-Import Company [Geleximco] and Hong Kong United Co. [HUI]) replace Vinacomin as the main investor. In October 2017, Geleximco-HUI submitted a proposal for the 1200 MW MW Quynh Lap 1 Power Plant Construction Project in which it would be implemented on a public-private partnership (PPP) basis and would be financed with a debt:equity ratio of 80:20. In 2018, five Chinese banks-- including the Industrial and Commercial Bank of China (ICBC), Bank of China (BOC), China Development Bank (CDB), China Construction Bank (CCB), and China Eximbank-- expressed interest in providing a USD 1.6 billion syndicated loan to Geleximco-HUI for covering the debt component. The joint venture would arrange the equity component equal to USD 500 million. It is unlikely that the Chinese banks ever formally signed a finalized loan agreement since Geleximco-HUI never took over. In December 2019, it was reported that the promoters are struggling to attract domestic and international financiers due to the USD 2.1 billion project not having a state guarantee. In November 2020, Nghe An province called on the Ministry of Industry and Trade (MOIT) to remove the Quỳnh Lập Power Plant from the from the national power development plan. It was also reported that Quỳnh Lập-1 and Quỳnh Lập-2 would likely be delayed until after 2030 under Vietnam's upcoming Power Development Plan VIII. An October 2021 report by GreenID lists Quỳnh Lập-1 as one of 18 coal-fired power stations in Vietnam that was struggling to secure financing. Given that China has committed to stop financing new coal-fired power stations, it will be extremely difficult to secure funding in the future.