Song Hau 2 Thermal Power Plant secures $980 million funding

The loan will be used for the design, equipment procurement, construction, and operation of the long-delayed project.

The Song Hau 2 Thermal Power Plant Project is implemented under the build-operate-transfer (BOT) model in Chau Thanh district, Hau Giang province.

Invested in by Toyo Ink Group Berhad, the plant features two 1,060 MW generators. With an estimated cost of approximately $3 billion, the 2.12GW thermal power plant is considered one of the important projects in Vietnam’s National Power Development Plan VIII.

Once put into operation, the project will contribute to diversifying power generation sources, ensuring energy security, bringing abundant revenue to the local budget, and creating jobs. The project is expected to play a role in the socioeconomic development of Hau Giang province and the Mekong Delta region in general.

According to a report by Vietcap released in April, Toyo Ventures Holdings Berhad (TVHB) provided an update that they have received a letter from the Ministry of Industry & Trade, maintaining the strict deadline for the Song Hau 2 Thermal Power Plant Project to have a financial remedy and commence construction by June 30, 2024.

The MoIT letter serves as a reminder of the “developer-side default.” However, TVHB announced that all the lenders are actively working with Eximbank of Malaysia (the project’s mandated lead arranger) to finalise the financing procedures.

Vietcap expects there will be no further extension of the deadline, which also aligns with the implementation plan for the PDP 8.

Toyo Ventures Holdings Bhd's subsidiaries have entered into an interim engineering, procurement, and construction (EPC) agreement with a consortium led by Sunway Construction Group Bhd in relation to the Song Hau 2 Thermal Power Plant Project in Vietnam.

Failure to discuss between investors and contractors as well as the weakness in management and inadequate operation capacity of contractors are two of the major reasons delaying the construction of three billion-dollar thermal power plants.

The inauguration of the $2-billion Song Hau 1 thermal power plant in the Mekong Delta province of Hau Giang will contribute to ensuring national energy security.