Malaysia’s Toyo Ink signs $2.2 bln deal for southern Vietnam power plant

Toyo Ventures Holdings Berhad’s subsidiary Toyo Ink and Song Hau 2 Power Company have signed a temporary engineering, procurement and construction (EPC) agreement with the Sunway-PECC2 Consortium in relation to the Song Hau 2 thermal power plant project in Vietnam.

Sunway-PECC2 is an unincorporated consortium between Malaysia’s Sunway Construction and Vietnam’s Power Engineering Consulting JSC 2 (PECC2), while Song Hau 2 Power Company is a Toyo Ink unit.

The contract price amounts to about $2.2 billion, Bernama - Malaysia’s national news agency - reported Wednesday

The interim EPC agreement will be terminated if the contract is not executed by the parties within six months from the date of signing, Bernama quoted a Toyo Ventures release as saying.

The Malaysian corporation noted that the agreement outlined a framework for negotiations and discussions for the parties to establish detailed terms and conditions for the design, engineering, procurement, manufacture, supply, construction, erection, testing, and commissioning of the 2,120-megawatt coal-fired power plant.

In November 2020, Toyo Ventures, via its units Toyo Ink and Song Hau 2 Power Company, signed a contract with the Vietnamese Ministry of Industry and Trade to develop the power plant in the Mekong province of Hau Giang on a build, operate, transfer (BOT) basis.

The 2,120MW project will cover 117.4 hectares in Chau Thanh district, and is estimated to cost $3.23 billion, which will be financed via a mix of debt and equity financing, according to Song Hau 2 Power Company.

Construction has not started as site clearance has yet to be completed because the investor has not finished paying compensation to residents, according to provincial officials.