The Multilateral Investment Guarantee Agency (MIGA), the political risk insurance and credit enhancement arm of the World Bank, has issued a $239.7 million guarantee to support the construction of the Hoi Xuan hydropower project in Northeastern Vietnam.
The consortium of lenders is led by Goldman Sachs and Bank of Tokyo Mitsubishi, with the loan arranged for VENCO Hoi Xuan Investment and Electricity Construction Joint Stock Company.
Carrying a 15-year tenor, the guarantee will support financing for the design, construction, operation and maintenance of the 102-megawatt (MW) hydropower plant. It covers the risk of default by the government on its repayment to lenders.
The facility, comprising a 43-metre-high dam and a reservoir with a capacity of approximately 63.7 million cubic metres, will produce and sell electricity to the national utility company under a power purchase agreement.
The demand for electricity in Vietnam is expected to double from 2014 to 2020 on the back of strong economic growth, MIGA said in the statement.
Tim Leissner, vice chairman of Investment Banking in Asia Ex-Japan at Goldman Sachs, said that clean, renewable and sustainable projects of this nature are vital as the country continues to climb up the wealth ladder.
More than 70 percent of investments in Vietnam’s new generation capacity is expected to come from the private sector. The agency sees the support to local independent power producers like Hoi Xuan as critical to meet the country’s electrification goals.
“Vietnam is diversifying its energy mix to increase energy supply and security, just as it is diversifying its financing sources to create a more secure base for infrastructure development in the future,” said Keiko Honda, MIGA's executive vice president.
If you do not receive this within five minutes, please try to sign in again. If the problem persists, please email: