Authority proposes transferring $2.1 billion thermal power plant to Geleximco-HUI partnership
By Nguyen Anh
June 22, 2018 | 08:32 AM GMT+7
The proposal of replacing project investor on Quynh Lap 1 thermal power plant located in Nghe An province, which costs over $2 billion is expected to speed up the progress of construction and operation to secure the existing plan on national energy security.
Perspective of Quynh Lap 1 thermal power plant
In the recent document submitted to the Prime Minister, Ministry of Industry and Trade (MOIT) proposed transfering the right to perform Quynh Lap 1 thermal power plant project to Geleximco corporation and its partner, Hong Kong United Investors Holding (HUI) as a replacement for Vietnam National Coal - Mineral Industries Holding Corporation Limited (Vinacomin).
Quynh Lap 1 thermal power plant is built on an area of 150 hectares and was officially assigned to Vinacomin by the Government as the project investor with total capital of $2.1 billion.
According to the assessment of MOIT, Vinacomin does not meet the capital needs to deploy the project on schedule. Additionally, by the end of September 2017, the total debt of Vinacomin was nearly $3.4 billion, with a debt/equity ratio of 2.5 times.
If investing in Quynh Lap 1 thermal power project, Vinacomin will have to raise an additional loan of $1.7 billion and after three years, the total debt of the corporation can go up to $4.4billion, which leads to the debt/equity ratio surpassing the permitted level.
Until now Vinacomin still has not been able to report to MOIT about the final results of its work with two investors, Kospo and Samtan in terms of the capital arrangement for the project.
As a result, MOIT concerns that this prolonging progress will delay the implementation and operation of the project by 2022-2023 according to the plan of supplemented VII power masterplan, affecting to the efficiency of the investment.
Thus, the authorities said that the hand over of Quynh Lap 1 thermal power plant project to Geleximco-HUI partnership will help Vinacomin reduce the pressure on capital arrangement and focus on implementing other projects.
80 percent of the total project investment will be mobilized from a syndicated loan of banks led by China's state-owned Development Bank such as China Bank, China Construction Bank, Industrial and Commercial Bank of China.
Gelemxico-HUI partnership also committed to a rapid progress once it is assigned to be the investor of Quynh Lap 1 thermal power plant.
In particular, within three months from the date of establishment, Geleximco-HUI partnership will sign the compensation and ground clearance agreement, then two months after that they will sign management consultancy and technical supervision contract.
In addition to the Quynh Lap 1 thermal power project, Geleximco-HUI partnership also expressed its wishes to invest in four other thermal power projects, including Quynh Lap 2 (1,200 MW), Quang Trach 1 (1,200 MW), Quang Trach 2 (1,200 MW), Hai Phong 3 (2,400 MW).
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