This is the first project is to be covered by US EXIM’s loan insurance within the framework of 1.5 billion credit line signed between two banks to finance wind farm program for Mekong Delta region.
Ms. Patricia Loui, vice president of US EXIM has led the delegation with the attendance of officials from US Embassy to Vietnam. For VDB’s side, there are Mr. Tran Ba Huan, General Director, Mme Dao Dung Anh, Deputy General Director and leaders of important department of VDB.
At the meeting, Ms. Patricia Loui has informed a new guideline related to energy development financing recently adopted by US EXIM Board of Management in response to US President, Mr. Barak Obama’s call for Climate Change Action Plan and US State Treasury’s policies in line with this call. According to this new guideline, US EXIM ceases mostly to finance coal plants and focus on clean energy projects or renewable energy projects. She also insists on US EXIM engagements to cooperate with VDB for the second phase of Bac Lieu wind power project and other projects within the wind power program in Mekong Delta region.
In response, Mr. Tran Ba Huan has expressed his high appreciation for US EXIM support to Bac Lieu project in particular and clean energy program in Vietnam in general. Being aware of climate change’s impact on the national economy, Vietnam government has applied different incentives to promote clean energy such as technical assistance, electricity sale price, providing credit with preferential condition to project developers through VDB. However, in comparison with other power sources, wind power requires high investment with long repayment. For this reason, commercial banks refuse or has limited involvement in financing projects of this kind. US EXIM support gives VDB better access to international funding source with more reasonable price and in return better support to borrowers in general and Cong Ly in particular.
Mr. General Director updated Bac Lieu project. For its second phase, VDB has signed a credit contract with the project owner with a value of more than VND 2 trillion as State investment credit for a tenor of 12 years. Besides, Cong Ly Company has concluded with GE Company an agreement to provide wind power equipment to the project. The supply contract up to USD 94 million has been signed on December 14, 2013
Actually, VDB is very proactive to collaborate with JP Morgan Bank, lead arranger for the loan facility to finance the second phase of the project with US EXIM’s guarantee. The loan signing will be a very foundation of tightened cooperation activities between two banks and speed up new loans within the 1,5 billion credit line that has been signed
Mr. Tran Ba Huan engages to cooperate with the project owner and JP Morgan to make necessary preparations for Vietnamese side. He also expects that US EXIM will speed up its appraisal process for the project application for US EXIM guarantee and support VDB in other related issues in order to implement the project in the soonest time.