The Japan Bank for International Cooperation and private lenders will extend roughly $832 million in syndicated loans to a gas development project in Vietnam, the state-backed lender announced on Monday.
JBIC is contributing about $415 million to the co-financing deal, with private financial groups providing the rest. The money will go toward developing the Block B gas field off the coast of southern Vietnam.
The financing will be used to install a pipeline for transporting gas to onshore power plants. The total cost for all projects connected to Block B is estimated to exceed $10 billion.
JBIC's co-financing package goes to three companies invested by Tokyo-based Mitsui Oil Exploration, a subsidiary of Japanese trading group Mitsui & Co.
Mitsui Oil Exploration holds a 23% interest in the gas field development and a 15% stake in the pipeline project.
Vietnam Oil and Gas Group, or PetroVietnam, and Thailand's PTT Exploration and Production are also taking part in the Block B development.
Last year, the Vietnamese government announced Power Development Plan 8, which aims to steadily reduce coal power's share in the nation's energy mix and achieve decarbonization by 2050.
But Vietnam faces obstacles in balancing carbon reduction and stable electricity supplies. During the March-May period of this year, coal-fired plants accounted for over 60% of power generation.
The country is turning to natural gas as an alternative energy source for the transition phase.
JBIC has extended a total of 525 billion yen ($3.26 billion) to projects in Vietnam as of the end of March 2023, according to the lender. Targets include the Nghi Son oil refinery and a biomass fuel production project. (July 8, 2024)
VIETNAM - Natural Gas - Production