ICBC contributes $880 million to $1.76 billion syndicated buyer’s credit loan for 1200MW Duyen Hai 2 Coal-Fired Power Plant Construction Project (Linked to Record ID#65148, #65791, #65794)

Project narrative

In December 2014, the Government of Vietnam granted preliminary approval to Teknik Janakuasa, a Malaysia-based company, to develop the 1200MW Duyen Hai 2 Coal-Fired Power Plant Construction Project on a Build-Operate-Transfer (BOT) basis for a 25-year period. A year later on December 29, 2015, the Vietnam Ministry of Industry and Trade and Teknik Janakuasa signed the implementation contract. Then, on December 28, 2016, China Eximbank and the Hanoi Branch of the Industrial and Commercial Bank of China (ICBC) signed a $1.76 billion syndicated buyer’s credit loan (BCL) agreement with Janakuasa Vietnam Ltd. — a project company and subsidiary of Teknik Janakuasa — for the project. China Eximbank reportedly contributed $880 million (captured via Record ID#65791) and ICBC reportedly contributed $880 million (captured via Record ID#72770) to the syndicated loan. The borrowing terms of the loan are unknown. However, it is known that the loan was supported by a Sinosure credit insurance policy, The borrower was expected to use the proceeds of the loan to partially finance an EPC contract signed in December 2015 with China Huadian Science and Industry Group Co. Ltd, a subsidiary of China Huadian Group Corporation. The total cost of the Independent Power Project (IPP) was $2.2 billion (or $2.4 billion) and it was reportedly financed according to a debt-to-equity ratio of 75:25. The purpose of the project was to construct a 1200MW coal-fired power plant — with two, 600MW power generation units (Unit 1 and Unit 2) — in Dan Thanh commune, Duyên Hải district, and Trà Vinh province. China Huadian Science and Industry Group was the EPC contractor responsible for implementation. Alstom and Teknik Janakuasa were also involved in the project as the main equipment suppliers. The EPC contractor mobilized at the project site on January 2, 2017. A formal groundbreaking ceremony took place on August 3, 2016. As of February 2020, construction was 58.71% complete and Unit 1 and Unit 2 were scheduled for commissioning in June 2021 and September 2021, respectively. On March 6, 2020, it was reported that construction of Duyên Hải-2 would be impacted by COVID-19 and that its estimated completion date of 2021 might be delayed. Then, in May 2020, it was reported that foreign workers for the plant were not being permitted to enter Vietnam from China due to Covid-19-related travel restrictions. As of July 2020, the project had achieved a 79.58% completion rate. 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 3 Coal-Fired Power Plant Construction Project (as captured via Record ID#65148, #72770, and #65794).