Vietcombank and PetroVietnam Power (PV Power) recently signed a VND4 trillion ($165.6 million) credit agreement for the partial funding of two LNG-to-power plants in the southern province of Dong Nai.

The 13-year agreement, with a grace period of three years, will serve the Nhon Trach 3 and 4 projects in Nhon Trach district.

PV Power, a subsidiary of the State-run PetroVietnam, initiated capital arrangements for the project in 2018 and is still in negotiations with foreign partners, including Japan’s Sumitomo Mitsui Banking Corporation (SMBC) and a partnership between ING and Citibank.

Construction of the $1.4 billion project, with a total capacity of 1,620 MW, began in 2021 with the initial task of levelling the construction site.

Nhon Trach 3 and 4 are scheduled to enter into commercial operations in November 2024 and May 2025, respectively, and are the first LNG-to-power plants in Vietnam.

Mr. Le Manh Hung, CEO of PetroVietnam, said the power plants are part of the group’s efforts to advance Vietnam’s net-zero commitment at COP 26.

Arranging capital for the projects has proven difficult without the availability of government guarantees. Another difficulty has been the uncertainty over ensuring fixed power output during the loan term, PV Power said in a 2022 review.

The engineering, procurement, and construction (EPC) package, the projects’ largest, was assigned to a consortium comprising South Korea’s Samsung C&T Corporation and Vietnam’s Lilama in March 2022.

As of the end of 2022, PV Power had completed contractor selection for 17 of 18 project packages. The remaining package deals with consultancy services for formulating a plan to convert surface water and wastewater discharge into freshwater sources.