Sumitomo's Van Phong 1 nears market

Sumitomo Corporation is negotiating the build-operate-transfer concession for the Van Phong 1 coal-fired power plant with the Vietnamese ministry of industry and trade, with the aim of signing a concession early in 2014. The 1,300 project, which has a projected capital cost of $2 billion, has been in the works since 2007, and in Sumitomo's hands since 2009.

If Sumitomo and co-sponsor Hanoinco can sign a concession, a power purchase agreement with state utility EVN and reach financial close in 2014, it may be possible for them to bring the plant into operations by the end of 2017. SMBC is advising the sponsors on the financing for Van Phong 1, which is likely to have a substantial export credit agency component.