PV Power scores $64 mln Vietcombank credit pact for LNG-to-power project

Vietcombank, one of Vietnam’s “Big-4” lenders, has signed a credit contract to provide Petrovietnam’s electricity arm PV Power with VND1,500 billion ($64 million) for the development of two major LNG-to-power plants in southern Vietnam.

PV Power this March launched a credit supply bid for domestic banks to develop the two plants, Nhon Trach 3 and 4 with a total generation capacity of 1,624 megawatts, in Dong Nai province neighboring Ho Chi Minh City. Nhon Trach 3 and 4 comprise the first LNG-to-power project licensed in Vietnam.

Vietcombank has been selected via bidding thanks to its most competitive interest rate, PV Power said while signing the credit contract with the major lender in Hanoi on Wednesday.

Also this March, PV Power selected a consortium between Samsung C&T and Vietnamese construction company Lilama via another bid, providing the partnership with a contract valued at almost $943 million to build the two power plants in Ong Keo Industrial Park.

PV Power, the developer of the $1.4 billion project, announced the engineering, procurement and construction (EPC) contract awarded to the consortium is about $101 million lower than its estimation.

The project is set to start commercial operation in either 2023 or 2024, with each plant designed to generate 812 MW. Samsung C&T will build gas turbines, steam turbines, heat recovery boilers, substations, and power transmission lines.

PV Power added American giant GE is the main supplier of equipment for the project as a global leader in producing gas turbines, steam turbines, heat and recovery boilers. GE’s latest 9HA.02 gas turbines are used for the project.

Prior to the EPC contract for Nhon Trach 3 and 4, Samsung C&T had said it was seeking more LNG-to-power opportunities in Vietnam.

In 2019, a consortium led by Samsung C&T obtained a contract to build Vietnam’s first LNG terminal at Thi Vai Port in Ba Ria - Vung Tau province, the hub of Vietnam’s oil and gas sector.

Up to now, no LNG gas power plants operate in Vietnam. In all, nine LNG-to-power projects have received in-principle agreement as independent power producers. Of these five found investors and could enter the phase of negotiating a power purchase agreement (PPA) with EVN. Others like LNG Long Son, LNG Ca Na, LNG Long An and LNG Quang Ninh are yet to find investors or only officially announced their investors recently.

Vietnam has attracted foreign investors in clean and renewable energy development as the Southeast Asian country eyes a green energy ecosystem through a net-zero transition. It is committed to cutting carbon emissions by 40% by 2030, and looks to carbon neutrality by 2050.