CDB contributes to $108 million syndicated buyer’s credit for Lai Chau 1200 MW Hydropower Plant Construction Project (Linked to Record ID#92260, #92261)

Project narrative

On July 10, 2013, Vietnam Electricity (EVN) — a Vietnamese state-owned power company — signed a VND 14.5 trillion ($700 million) commercial loan agreement with a syndicate of Vietnamese lenders for the 1200 MW Lai Chau Hydropower Plant Construction Project. The members of the lending syndicate included Vietnam Bank for Industry and Trade (VietinBank), Bank for Investment and Development of Vietnam (BIDV), and Vietnam Bank for Agriculture and Rural Development (Agribank). Then, on November 28, 2013, EVN signed a $108 million syndicated buyer’s credit (loan) agreement with Bank of China (BOC), China Eximbank, China Development Bank (CDB), and BNP Paribas for the 1200 MW Lai Chau Hydropower Plant Construction Project. This loan carried a 13 year maturity and an unknown interest rate. The Government of Vietnam issued a sovereign guarantee in support of the loan. The loan also benefited from a Sinosure credit insurance policy. The proceeds of the loan were to be used by the borrower to partially finance a $144.76 million commercial contract between EVN, Alstom, and Hydrochina Zhongnan Engineering Corporation, which was signed in January 2013. BOC's contribution is captured in Record ID#92260, China Eximbank's contribution is captured in Record ID#92261, and CDB's contribution is captured in Record ID#92262. The purpose of the project was to construct a 1200MW hydroelectric power plant — with three, 400MW power generation units (Unit 1, Unit 2, and Unit 3) — on the Da river in Nam Nhun district and Lai Chau province. Each 400MW Francis turbine was manufactured at the Alstom's plant in Tianjin, China. Power Construction Consulting Joint Stock Company No. 1 was the contractor responsible for project design. Song Da Corporation — a Vietnamese state-owned enterprise — was the general contractor responsible for implementation, but Vietnam Machinery Erection Corporation (LILAMA), Infrastructure Construction and Development Corporation, and Truong Son Construction Corporation were also involved in implementation. Son La PMB, Fichtner (Germany), and Son La Hydropower Company were responsible for project supervision. Alstom and Hydrochina Zhongnan Engineering Corporation were responsible for providing electromechanical equipment for the project. TBEA was responsible for providing 500kV transformer equipment. NHVS was responsible for providing 500 kV GIS equipment. Construction began on January 5, 2011. Stage 1 of the river blocking process commenced on April 24, 2012. Stage 2 of the river blocking process commenced on October 15, 2014. The first power generation unit (turbine) began generating power for the national grid on December 14, 2015. The second power generation unit (turbine) began generating power for the national grid on June 20, 2016. The third power generation unit (turbine) began generating power for the national grid on November 9, 2016. The power plant was formally inaugurated on December 21, 2016, one year ahead of schedule. However, the project was not completed until December 20, 2017. The power plant was expected, upon completion, to improve the irrigation water supply for downstream areas, especially in the dry season as well as river navigation and water supply for agriculture, among other socio-economic factors in the Lai Chau province. It is the third largest hydroelectric power station in Vietnam, generating more than 4.7 billion kWh every year to the national grid, and the third on the Da river. It is connected with the Hòa Bình Dam (completed in 1994) and the Sơn La Dam (inaugurated in 2012).