IFC proposes $60m loan to Vietnam's Thuan Binh wind power

Out-Law News | 19 Mar 2021 | 10:02 am | 1 min. read

The International Finance Corporation (IFC) is considering a $60 million loan to Vietnam’s state-owned Thuan Binh Wind Power (TBW) to finance the development and construction of two wind power projects.

The IFC is the World Bank Group’s private sector arm and the financing would be a senior, secured corporate loan.

The projects are the 25.2 megawatts (MW) Phu Lac 2 project in Binh Thuan province and the 29MW Loi Hai 2 project in Ninh Thuan province. It is expected to receive board approval by 16 April.

John Yeap of Pinsent Masons, the law firm behind Out-Law, said: “The involvement of multilateral agencies such as the IFC in the advancement of the decarbonisation agenda of nations is clearly important. This proposed loan underscores the importance of this involvement, including the ability of international lenders to finance on the basis of existing regulatory and contractual framework as well as grid conditions.  Curtailment for instance is a challenge that has to be addressed if such projects are to fully realise their investment value.”

It is expected that construction of main plant components including wind turbines and substation will start in March. Construction is expected to be completed in eight months for both projects.

The PL2 project has a total site area of 8.8 hectares and the total site area for the LH2 project is 7.6 hectares.

The PL2 project is an extension of TBW’s existing operational 24MW Phu Lac 1 project that has been operating from September 2016. The phase 1 cost $49 million, in which German National Bank (KfW) provided funding of ‎€35m ($42m).