Vietnam / Loan Insurance for Van Phong 1 Supercritical Coal-fired Power Plant

Nippon Export and Investment Insurance (NEXI, Chairman and CEO: Kazuhiko Bando) has decided to provide loan insurance to support the Van Phong 1 supercritical coal-fired power plant project.

The project will be undertaken by Van Phong Power Company Limited (hereinafter referred to as “Van Phong Power”), which has been founded by Sumitomo Corporation. The project will build an onshore 1,320MW (660MW x 2 units) supercritical power plant at Van Phong Bay, Khanh Hoa Province located in Vietnam’s central coastal region. After the commencement of commercial operation, the station will be run and maintained for 25 years selling its generated power to Vietnam Electricity.

With disparities between electricity demand and supply growing in Vietnam, this project is expected to serve as a base-load power source, contributing to the nation’s economic development by stabilizing supply. In this context, providing support for the project is in line with the Strategic Energy Plan announced by the Japanese government in July 2018.

Under the project, Van Phong Power is planning to raise approximately USD 1,998 million by project financing. In the form of co-financing with the Japan Bank for International Cooperation (JBIC), seven private financial institutions— Sumitomo Mitsui Banking Corporation; MUFG Bank, Ltd.; Mizuho Bank, Ltd.; Oversea-Chinese Banking Corporation Limited; DBS Bank Ltd.; Sumitomo Mitsui Trust Bank, Limited; and Bank of China—will provide loans of approximately USD 799 million. NEXI will offer political risk coverage under loan insurance for this commercial lenders portion. NEXI will also provide an extended political risk coverage concerning the Vietnamese government guarantee.

As Japan’s policy-based financial institution, NEXI will continue to actively support Japanese companies in their efforts to develop infrastructure throughout Asia as well as to expand their business overseas.

Contact: Power Group, Structured and Trade Finance Insurance Department
Tel: +81-(0)3-3512-7340