Export-Import Bank of Malaysia Berhad has informed that it is the appointed Mandated Lead Arranger for a funding raising exercise of up to USD2.68 billion, one of the biggest of its kind to be raised by a Malaysian bank for an overseas project.
The fundraising exercise will be co-led by one of Vietnam’s largest state banks, with more than 60% of the funds to be raised coming from 10 Vietnamese banks. Exim said the project is aligned with its mandate to support Malaysian companies venturing overseas involves the development of the first Ultra- Supercritical (USC) technology coal plant in Vietnam, marking Malaysia’s significant role in ASEAN’s energy transition.
The USC technology is at the forefront of energy transition, offering substantial efficiency and environmental benefits, and aligns with Vietnam’s strategic energy transition plan to phase out less efficient traditional coal plants. The project is in support of the country’s aim to reduce coal power reliance to 20% by 2030, from 31.1%.
This project, to be undertaken by the BOT company, Song Hau Power 2 Company Ltd, and will be constructed by an EPCC consortium made up of Sunway Construction Sdn Bhd and Vietnam’s Power Engineering Consulting Joint Stock Company 2 (“PECC2”). PECC2, which is a subsidiary of Electricity of Vietnam, the state-owned enterprise, is also the appointed O&M for the plant throughout the concession period.
The Vietnam’s energy transition plan has considered the calculation of when the Song Hau 2 project is put into operation, and adoption of the USC technology for the plant is a step towards the country achieving their Net Zero target in
This project is said to addresses the critical energy shortages in southern Vietnam, benefiting 36.24 million people facing continuous power shortages. As a developmental financial institution, the Bank is committed to supporting equitable and just energy transition efforts. The plant will be constructed in the Hau Giang province contributing to poverty alleviation efforts. Vietnam currently faces a shortage of 9.11% power generation against the current population’s consumption needs.
While USC plants have been adopted in Malaysia and Indonesia, this will be Vietnam’s first plant to adopt the transitional technology.
The project involves collaboration with other regional development banks, leveraging technical experience on energy transition solutions with other countries in ASEAN. EXIM Bank has successfully arranged the Equipment Financing Facility for USD980.0 million to be provided by Singapore based i- Power Solutions Pte Ltd, which serves as a bridger to the Syndicated Financing Facilities.
