VEB and IIB to finance Long Phu 1 power plant
VEB and IIB to finance Long Phu 1 power plant
Vnesheconombank, International Investment Bank, and PetroVietnam have entered into a tripartite memorandum determining the cooperation framework of financing the construction of Long Phu 1 power plant in Vietnam, according to International Investment Bank’s press release dated September 8.
Russia-based Bank for Development and Foreign Economic Affairs—Vnesheconombank (VEB), one of Russia’s largest financial institutions—together with International Investment Bank (IIB), whose member countries include Vietnam, and the Vietnamese oil and gas group signed the memorandum in Ho Chi Minh City during the 20th meeting of the Inter-Governmental Russian-Vietnamese Commission for Trade-Economic and Scientific-Technical Cooperation.
Daniil Algulyan, VEB’s senior vice president and head of International Business, Export and Financial Institutions, Nikolay Kosov, chairman of the IIB Board, and Nguyen Quynh Lam, PetroVietnam vice president, signed the document, agreeing that VEB and IIB will finance the equipment supply for the project.
In particular, the banks will provide loans for the purchase of Russian high-tech industrial products and for the provision of associated works and services. The relevant decision was taken by the management bodies of VEB and approved by IIB.
“In accordance with VEB’s new strategy, VEB is prepared to provide comprehensive financial, guarantee, and insurance support for the projects and commercial transactions aimed at expanding the supply of high-tech products to foreign markets. The memorandum marked an important step towards promoting Russian industrial products to Asian markets and created the necessary conditions for development of the partnership between Russian exporters and importers from Southeast Asia,” said Algulyan.
“The memorandum is a testament to our joint efforts in supporting Russian exports and the energy sector of Vietnam, one of IIB’s shareholders. The bank’s Credit Committee approved lending to Long Phu 1 project, which is aimed at strengthening Vietnam’s energy independence and has a strong integration component. Equipment for the power plant will be supplied from the following three member countries: Russia, Vietnam, and the Czech Republic,” said Kosov.
Aircraft building, railroad rolling stock manufacturing, car manufacturing, power engineering, agribusiness and agricultural machine building, nuclear energy, and innovation are VEB’s sectorial priorities in supporting the export of high-value-added products.
The construction will be carried out by an international consortium headed by PJSC Power Machines. On June 2, 2017, during the Saint Petersburg International Economic Forum, VEB and Power Machines signed an agreement to facilitate power equipment exports.
