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Overview

China Eximbank provides RMB 400 million loan for Formosa Plastics Vietnam Ha Tinh Blast Furnace Project

Commitments (Constant USD, 2023)$65,656,016
Commitment Year•2016Country of Activity•Viet NamDirect Recipient Country of Incorporation•Viet NamSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2016
End (planned)
Jun 1, 2017
End (actual)
May 18, 2019

Geospatial footprint

Map overview

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The Ha Tinh Formosa Plastics Steel Complex is located in Kỳ Phương commune, Kỳ Anh district, Hà Tĩnh province. More detailed locational information can be found at https://www.openstreetmap.org/way/630749161

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Funding agencies

State-owned Policy Banks

  • Export-Import Bank of China (China Eximbank)

Receiving agencies

Joint Venture/Special Purpose Vehicles

  • Hung Nghiep Formosa Ha Tinh Steel Limited Company

Implementing agencies

State-owned companies

  • Metallurgical Corporation of China Ltd (MCC)

Loan description

China Eximbank provides RMB 400 million loan for Formosa Plastics Vietnam Ha Tinh Blast Furnace Project

Interest type•Unknown

Narrative

Full Description

Project narrative

In 2016, China Eximbank and Hung Nghiep Formosa Ha Tinh Steel Limited Company (台塑河靜鋼鐵興業) — a special purpose vehicle and joint venture of China Steel Corporation (CSC), Formosa Plastics Corporation (台灣塑膠), Nan Ya Plastics Corporation (南亞塑膠), Formosa Chemicals & Fibre Corporation (台塑化纖), Formosa Taffeta Corporation (福懋興業), Formosa Petrochemical Corporation (台塑石化), and Japan’s JFE Steel — signed an RMB 400 million loan agreement for the Formosa Plastics Vietnam Ha Tinh Blast Furnace Project. The borrowing terms of the loan are unknown. The purpose of the project was to install two blast furnaces at the Ha Tinh Formosa Plastics Steel Complex in in Kỳ Phương commune, Kỳ Anh district, and Hà Tĩnh province. Metallurgical Corporation of China Limited (MCC) was the EPC contractor responsible for project implementation. The No. 1 and No. 2 blast furnaces were originally scheduled to be put into operation in June 2016 and June 2017, respectively. However, the project encountered a variety of problems and delays. On March 24, 2015, a 30-meter-high scaffolding section at the project site collapsed, killing 16 construction workers and injuring 27 others. Then, in June 2016, the complex was found to be discharging cyanide and other pollutants that killed fish along a 130-mile stretch of the Vietnamese coast. After a Vietnamese government report confirmed that Hung Nghiep Formosa Ha Tinh Steel Limited Company was responsible for the environmental damage, the company agreed to pay $500 million in compensation for discharging water containing chemicals such as phenol, cyanide and iron hydroxides. Then, on May 29, 2017, the plant restarted (and one of the blast furnaces was put into operation) after its operations were halted in the wake of the disaster. However, one day later (on May 30, 2017), a dust explosion rocked the Ha Tinh Formosa Plastics Steel Complex. The second blast furnace did not become operational until May 18, 2019.

Staff comments

1. The Chinese project title is 台塑河靜鋼鐵興業責任有限公司 or 中冶赛迪台塑河静钢厂1、2号高炉成套设备供货项目 or 台塑河静钢厂 or 中冶赛迪台塑河静钢厂项目. The Vietnamese project title is Công ty TNHH Gang Thép Hưng Nghiệp Formosa Hà Tĩnh. 2. Hung Nghiep Formosa Ha Tinh Steel Limited Company is also sometimes known simply as Formosa Ha Tinh Steel Limited Company.