Mong Duong II Thermal Power Generation Project

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The Mong Duong II Thermal Power Generation Project is a 1,200 MW coal-fired plant located in Quang Ninh Province, Vietnam. In 2010, the project company Mong Duong AES-TKV was granted a 25-year Build, Operate, Transfer (BOT) concession, with the end of construction as the start date of the 25-year contract. AES, with 51% equity, holds a majority stake in the project company. PSC Energy Global Company, a wholly-owned subsidiary of POSCO Power Corp owns 30%, and the Stable Investment Corporation, a subsidiary of China Investment Corporation owns 19%. In January 2013, construction was reported as 2/3rds completed. The project company agreed to sell power to the state-owned Electricite Vietnam (EVN) under a 25-year Power Purchase Agreement (PPA). The PPA was U.S. dollar denominated and allows for a fuel cost pass through, protecting the project from coal price fluctuations. The company also signed a 25-year coal supply agreement with the state-owned Vietnam National Coal-Mineral Industries Group (Vinacomin - TKV). Engineering, Procurement, and Construction (EPC) contract was awarded to Doosan Heavy Industries and Construction Co. Ltd. of South Korea. Construction started in August 2011, and commercial operations were expected to commence in June 2015. Total project cost was estimated at US$ 1.95 billion. Financial close occurred on 24th August 2011. The 12 lenders were foreign banks BNP Paribas, Credit Agricole, HSBC, ING, Natixis, Societe Generale, Sumitomo Mitsui Banking Corp., Mizuho Corporate Bank, Standard Chartered, UniCredit, Credit Industriel et Commercial and DZ Bank. Korea Eximbank, the biggest single provider of direct debt, and Korea Trade Insurance Corporation (K-sure) will provide extended political risk cover. The project was the first opportunity for South Korean ECAs to participate in Vietnam.