Citi and ING Germany have closed a US$521.5 million loan for Petrovietnam Power Corporation (PV Power), with export credit agency (ECA) cover provided by Korea Trade Insurance Corporation (K-Sure) and Swiss Export Risk Insurance (SERV).
The 12-year debt financing will support the completion of PV Power's Nhon Trach 3 and 4 power plants, which are set to be Vietnam's first LNG-to-electricity plants.
Located in the southern Dong Nai province, the two plants are expected to add 1,624 megawatts of capacity to Vietnam‘s electricity network, and will play a crucial role in ensuring its energy security.
Citi and ING acted as joint coordinators and joint mandated lead arrangers. Citi also acted as K-Sure agent, global facility agent, security agent, intercreditor agent, and account bank, while ING acted as SERV agent.
“Nhon Trach 3 and 4 Power Plants are key national projects and will help meet the growing demand for power in the country,” says PetroVietnam Corporation chief financial officer Nguyen Duy Giang. “The projects will open a new chapter in the formation and development of the LNG project chain in Vietnam.”
“Citi has been working with PV Power to support this initiative since 2020 and jointly provided a US$300 million short-term loan,” adds Pham Huu Hai, Citi Vietnam’s corporate banking head and Citi Hanoi’s branch director. “This project is a driving force to promote economic development, and will reduce the power shortage in the country’s commercial hub in South Vietnam.”
As SERV agent, ING jointly arranged the SERV cover for about US$291.5 million of PV Power's total long-term, ECA-covered financing. "We see further cooperation potential with European ECAs in Vietnam, and the wider Asian market where ING is locally well represented," says Michiel de Vries, ING’s global head of structured export finance.
The gas turbines are being provided by GE, which in 2022 won an order from engineering, procurement and construction contractor Samsung C&T Corporation. GE Vernova’s financial services unit played a role in bringing in the ECA financing.
Once in operation, the new power plants are expected to provide electricity for three large industrial areas in the southern region including Ho Chi Minh City, Dong Nai, and Ba Ria-Vung Tau provinces. By using highly efficient natural gas and GE’s H-class technology, the power plants will have a lower environmental impact, with 60% less carbon emissions compared to coal-fired thermal plants with the same electrical output.
Vietnam still relies on coal to fuel about a third of its electricity output. The growth of gas-fired power generation will support its energy transition and accelerate renewables penetration by enhancing the reliability and stability of the energy grid. This project will contribute to the implementation of Vietnam’s commitment to achieving net-zero carbon emissions by 2050 by supporting the rapid expansion of renewable energy through its dispatchable power profile.
