Ministry of Industry and Trade has sent a letter to Prime Minister of the Government to recommend the allocation of the Geleximco Group – HUI to the Quynh Lap 1 thermal power plant project (Nghe An) the coal mining – mineral Vietnam (TKV).
However, Ministry of Industry and Trade is concerned about the fact that 80% of the project’s capital is borrowed from China.
Ministry of Industry and Trade has sent a letter to the Prime Minister of the Government to recommend the allocation of the Geleximco Group – Hong Kong United Limited Company (HUI) to the Quynh Lap 1 thermal power plant project (Nghe An) the coal mining – mineral Vietnam (TKV). However, Ministry of Industry and Trade is concerned about the fact that 80% of the project’s capital is borrowed from China.
Borrowing from China to make a billion dollar thermal project
According to the Ministry of Industry and Trade, the reason for proposing Geleximco to TKV to carry out the Quynh Lap 1 thermal power plant project is because the capacity of Vinacomin does not meet the demand for capital to deploy the project on time.
Specifically, the Ministry of Industry and Trade said that by the end of September 2017, total debt of Vinacomin was about VND 78,000 billion, with a debt / equity ratio of 2.5 times.
If the capital is invested in Quynh Lap 1 thermal power plant, Vinacomin will have to raise another 39,000 billion dong of debt and after three years, the total debt of the group will reach over 100,000 billion dong, leading to the debt ratio. / equity will exceed the allowable limit.
According to the Ministry of Industry and Trade, after more than two months, TKV has not yet reported to the Ministry on the final working result of two investors Kospo and Samtan (Korea) on arranging loans for the project. Government guarantee, despite the initial agreement reached the capital contribution of TKV 36%, Kospo 34% and Samtan 30%.
As a result, the Ministry of Industry and Trade is not aware of when the parties reach the final agreement and will delay the project implementation and operation by 2022 – 2023 according to the revised electricity plan VII.
Although the proposal to deliver the Quynh Lap 1 thermal power plant project to the Geleximco-HUI joint venture, however, the ministry is concerned that 80% of the project’s capital will come mainly from China.
“The Geleximco and joint venture financing scheme is largely based on loans from China, with 20% of equity and 80% of loans. It is expected that the joint venture will raise capital from a bank complex led by the State Bank of China, “said Ministry of Industry and Trade.
The joint venture is also committed to rapid progress: if it is assigned to be the investor of Quynh Lap 1 thermal power plant, within 3 months from the date of establishment, the joint venture will sign the compensation and ground clearance agreement. The The next 2 months, the contract of management consultancy, technical supervision.
EVN expressed its unwillingness to hand over the thermal power project to Geleximco – HUI. EVN argues that Geleximco’s proposal to invest in the form of PPP is not regulated for electricity.
Long-established partnerships will slow the progress of the project. Up to now, Quang Trach 1, Quang Trach 2 thermal power projects have been assigned by the Prime Minister to EVN.
Previously, on July 31, 2017, Geleximco – HUI jointly signed a proposal in principle for investment in five projects Quynh Lap I, Quynh Lap II, Quang Trach I , Quang Trach II and Hai Phong III. PPP investment form, in which the partnership investment 75% – 80% of capital.
The second time on October 16, 2017, this partnership continues to have a letter to the Prime Minister proposed investment in two thermal power projects Quynh Lap I and Quang Trach II.
At the separate proposal for Quynh Lap I and Quang Trach II projects, the proposed financial plan will be responsible for arranging loans from credit institutions and international commercial loans. Government guarantee.
Who is HUI?
According to the business registration certificate, HUI is a Hong Kong business newly established on January 15, 2004, based in an apartment on Queen Street, Central, Hong Kong. To invest in Vietnam, the company has established Hong Kong United Investment Company Limited (HUI Vietnam) on August 15, 2016.
HUI Vietnam has a chartered capital of VND1,100 billion operating in key areas including construction, rail, road and construction.
Although the newly established entity behind HUI is KAIDI New Energy Corporation (China). HUI is a company established by KAIDI to raise capital for investment in major projects in the region, including Vietnam. HUI’s equity flow is arranged by KAIDI – also the largest shareholder of HUI.
KAIDI Duong Quang Corporation is a partner in implementing many energy projects in the world. In Vietnam, in 2009, KAIDI was selected as general contractor and started the Mao Khe – Quang Ninh thermal power plant (owned by KTV). This is the largest thermal power project in Vietnam and has been in operation since April 2013.
In 2014, Geleximco will continue to cooperate with KAIDI to build Thang Long Thermal Power Plant in Quang Ninh, scheduled to operate Unit 1 in Q2 / 2018.
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