AES-VCM Mong Duong Power Company US$1.95 billion project financing

Financial adviser: HSBC

Bookrunning mandated lead managers: BNP Paribas, Crédit Agricole CIB, HSBC, ING, Natixis, Société Générale, Sumitomo Mitsui Banking Corporation Mandated lead arrangers: Mizuho Corporate Bank, Standard Chartered Bank, UniCredit

Lead arrangers: Crédit Industriel et Commercial, DZ Bank

The US$1.95 billion project financing for AES-VCM Mong Duong Power Company in Vietnam was complicated by the nationality of the sponsors, comprising AES Corporation of the US (51%), Posco Power of South Korea (30%) and China Investment Corporation (19%), with each of them having specific interests that needed to be addressed.

The Chinese banks were considered in the initial phase, but the sponsors opted for Korean banks because of the easier approval process.

The deal marked the first involvement of the Korean export credit agencies K-sure and Kexim in Vietnam’s power sector on the back of Posco Power’s equity stake and in the engineering, procurement and construction (EPC) contract with Doosan Heavy Industries and Construction.

The transaction is the first IPP financing in Vietnam since 2003 and the first ever coal IPP in the country. It was concluded at a critical moment when Vietnam’s credit rating was downgraded and Vinashin defaulted on a US$600 million loan.