ICBC contributes to $1.89 billion syndicated loan for 1200 MW Nam Dinh 1 Independent Power Project (Linked to Project ID#90862, #90864, #89169, #90863, #92281)

In April 2008, Government of Vietnam approved the construction site in Nam Dinh for the power station. Then, in 2012, Vietnam’s Ministry of Natural Resources and Environment (MONRE) approved the project’s environmental impact assessment (EIA). In October 2014, ACWA Power and Taekwang Power Holdings signed a joint development agreement (JDA) for this project. Then, in January 2016, Vietnam’s Ministry of Industry & Trade signed a build-operate-transfer (BOT) agreement with the Taekwang Power Holdings-ACWA Power consortium. Under the terms of the BOT agreement, the consortium agreed to build and operate the power plant for a period of 25 years and then transfer it to the Government of Vietnam. In April 2017, Vinacomin — a Vietnamese state-owned enterprise — reached a coal supply agreement with the two project sponsors. Vietnam’s Ministry of Planning and Investment subsequently issued an investment registration certificate (IRC) to develop the project to Nam Dinh First Power Holdings, a joint venture incorporated by ACWA Power (50% ownership stake) and Taekwang Power Holdings (50% ownership stake) in Singapore in July 2017. The total project cost is $2.52 billion and it is being financed according to a 75:25 debt-to-equity ratio. On May 8, 2019, ACWA Power and Bank of China (BOC) signed an memorandum of understanding (MOU) regarding the financing of the project. Then, on December 16, 2019, a syndicate of seven Chinese lenders — Agricultural Bank of China (ABC), Bank of China (BOC), China Construction Bank (CCB), China Development Bank (CDB), the Export-Import Bank of China (China Eximbank), China Minsheng Bank (CMBC), and Industrial and Commercial Bank of China (ICBC) — and Nam Dinh First Power Company Limited — a special purpose vehicle and wholly-owned subsidiary of Nam Dinh First Power Holdings— signed a $1.89 billion loan agreement for the 1200 MW Nam Dinh 1 Independent Power Project. The loan carries a 20-year maturity, but its grace period and interest rate is unknown. The borrower purchased credit insurance from Sinosure. The loan proceeds are to be used by the borrower to partially finance an EPC contract between ACWA Power and China Gezhouba Group International Engineering Co., Ltd which was signed in May 2019. CDB's estimated contribution is captured via Project ID#89169. China Eximbank’s estimated contribution is captured via Project ID#90862. BOC’s estimate contribution is captured via Project ID#90863. CCB’s estimated contribution is captured via Project ID#90864. ICBC’s estimated contribution is captured via Project ID#92280. ABC’s estimated contribution is captured via Project ID#92281. China Minsheng Bank’s estimated contribution is not captured in a separate AidData project record because it is a privately-owned bank. A $600 million equity contribution to the project company (Nam Dinh First Power Company Limited) was split between the two project sponsors: Taekwang Power Holdings (50% stake), a subsidiary of South Korea's Taekwang Group, and First National Operation & Maintenance Co. (50% stake), a subsidiary of Saudi Arabia's ACWA Power. The purpose of the project is to construct a 1200 MW coal-fired power plant — with two, 600MW power generation units — in Hai Hau District and Nam Dinh Province. The plant is to be equipped with the new application of clean technologies for coal utilization – Circulating Fluidized Bed Combustion (CFBC) as an alternative to Pulverized Coal Combustion (PCC) for power generation with the coal supplied by Vinacomin, a government owned coal mined company. China Gezhouba Group International Engineering Co., Ltd. — a subsidiary of China Gezhouba Group Corporation (CGGC) — is the EPC contractor responsible for implementation. The 1200 MW Nam Dinh 1 Independent Power Project has experienced a series of delays and implementation obstacles. In order to create the power plant, roughly 300 households will need to relocated and receive compensation. The local population has also expressed concerns regarding pollution of the farming and fishing industries. Additionally, the project has struggled to maintain momentum because the both the Government of Vietnam and the Government of the People's Republic of China have pledged to stop financing and building new coal-fired power projects. Construction was originally scheduled to begin in 2014. However, according to the Government of Vietnam’s 2016 Revised Power Development Plan, Phase 1 Unit 1 was rescheduled for completion in 2020 and Phase 1 Unit 2 was rescheduled for 2021. Phase 2 was subsequently cancelled. In June 2019, according to a Vietnam Ministry of Industry & Trade's report on the implementation of the revised seventh Power Development Plan (PDP7), the completion date for Unit 1 was further delayed to 2024 and the completion date for Unit 2 was further delayed to 2025. In February 2020, the Government of Vietnam’s National Steering Committee on Power Development stated that Unit 1 was scheduled to be commissioned in Q1 2025 and Unit 2 in Q3 2025. Commissioning dates are now scheduled for 2025. In September 2020, the Standing Deputy Secretary of the Nam Dinh Provincial Party Committee, announced that the first step toward building the power plant would begin with the construction of a road in the coastal economic zone where the plant will be located. Then, in October 2020, a project company representative disclosed that the project investor was planning to officially sign the BOT contract with the Government of Vietnam by early November 2020. Following this milestone, the investor would transfer all of the funding needed to implement the project, including compensation funds for local stakeholders. Construction was at that time expected to start by the end of 2020. However, in 2020, ACWA Power decided not to pursue any new coal projects in line with its commitment to decarbonization. Therefore, they have ‘fully written-off the incurred project development and related costs of the Nam Dinh 1 IPP project in Vietnam, amounting to SAR 80.9 million’. As of July 2022, there was no evidence that construction had commenced. However, site preparation work was reportedly underway.

Additional details

1. This project is also known as Phase 1 of the 1200 MW Nam Định 1 Coal-Fired Power Plant Project, the Nam Định 1 Power Plant Project, Nam Dinh 1 Build-Operate-Transfer (BOT) Thermal Power Plant Project, the 1.2GW Nam Dinh 1 IPP Project, and the Nam Dinh Phase I Coal-fired Power Plant Project. The Vietnamese project title is Dự án nhà máy nhiệt điện BOT Nam Định 1 or Dự án Nhiệt điện Nam Định 1 or Nhiệt điện Hải Hậu or Nhà máy Nhiệt điện than Hải Hậu. The Chinese project title is 越南南定I期BOT热电厂项目 or Nam Dinh 1燃煤电站的投资项目 or 北部南定1燃煤电站的投资项目 or 越南南定燃煤电站项目 or 越南南定电厂 or 南定燃煤电站项目 or 越南南定2×600MW燃煤电站项目. 2. ACWA Power is legally incorporated in Saudi Arabia and Taekwang Power Holdings is legally incorporated in South Korea. 3. Nam Dinh First Power Company Limited was legally incorporated in Vietnam as as a special purpose vehicle and wholly-owned subsidiary of Nam Dinh First Power Holdings (which was legally incorporated in Singapore). In 2019, CIC Capital — a subsidiary of the state-owned China Investment Corporation (CIC) — acquired a 20% equity interest in Nam Dinh First Power Holding from its shareholders (ACWA Power and Taekwang Power Holdings). CIC is a sovereign wealth fund responsible for managing part of the People's Republic of China's foreign exchange reserves. 4. The size of the financial contributions made by Agricultural Bank of China, Bank of China, China Construction Bank, China Development Bank, the Export-Import Bank of China, China Minsheng Bank, and ICBC to the lending syndicate are unknown. For the time being, AidData assumes equal contributions ($270 million) by all of the members of the lending syndicate. IJGlobal does not identify ICBC or Agricultural Bank of China as participants in the lending syndicate. As such, it assumes $380 million (equal) contributions from all other participants in the lending syndicate. 5. Some sources refer to the name of the borrowing institution as Nam Dinh 1 Thermal Power Co., Ltd. 6. This project was originally going to be financed by and implemented by Korean entities but circa 2016 they backed out and were replaced by Chinese financiers and Chinese contractors.

Number of official sources

18

Number of total sources

50