This represents one of the largest credit contract within the energy sector and supports the country’s most extensive gas development project to date. It underscores Vietcombank’s pioneering role and Petrovietnam’s proactiveness in arranging capital for national key projects, particularly at a time when global financing for fossil fuel-related ventures is increasingly constrained. The capital arrangement received close and timely guidance from the Government Office, the State Bank of Vietnam (SBV), and the Ministry of Finance.
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The signing ceremony for the credit contract worth over 1 billion USD between Vietcombank and Petrovietnam on October 7 |
Earlier, both sides signed a frame credit agreement in March last year, laying the foundation for this contract.
At the signing ceremony, Deputy Prime Minister Ho Duc Phoc affirmed that the credit contract demonstrates efforts in combining fiscal, monetary, and foreign exchange management policies to channel capital into strategic projects.
The Block B – O Mon gas-to-power chain projects, he said, will create economic breakthroughs and domino effects while ensuring security for national development, urging Petrovietnam to join hands with both domestic and foreign partners to ensure the projects’ progress, safety, and optimal efficiency.
According to Petrovietnam Chairman Le Manh Hung, the project chain, featuring Block B gas field development project (upstream), Block B – O Mon gas pipeline project (midstream), and four gas-to-power plants at O Mon Power Center, will be invested at more than 12 billion USD.
Gas from Block B will provide a stable and long-term fuel supply for power plants in the Mekong Delta, helping reduce fuel imports, enhance self-sufficiency, and ensure flexible operation of the national power system in line with the revised eighth Power Development Plan (PDP VIII) and Vietnam’s commitments to energy transition and emission reduction, he added.
Meanwhile, Chairman of the Board of Directors of Vietcombank Nguyen Thanh Tung stressed that the bank, boasting considerable experience, strong financial capacity, and professional staff, pledges to provide optimal financial solutions and accompany Petrovietnam to ensure the success of the project chain, which is vital to the national energy security as well as the country’s sustainable development.
SBV Governor Nguyen Thi Hong praised Vietcombank’s effort in arranging large-scale funding amidst volatile foreign exchange markets, emphasizing that the partnership will help realize the Party and State’s directives on safeguarding national energy security. Vietcombank’s financing package meets up to 70% of the capital needs for the upstream and midstream phases.
The central bank will continue coordination with competent ministries to complete foreign exchange and credit mechanisms while directing financial institutions to prioritize funding for strategic projects in both VND and foreign currencies.
The Block B – O Mon gas-to-power project chain is a national key energy project with investment participation from Petrovietnam, the PetroVietnam Exploration Production Corporation (PVEP), Japan’s Mitsui Oil Exploration Co. (MOECO), and PTT Exploration and Production Public Company Limited (PTTEP). Vietnam holds a 70% stake, with foreign partners accounting for 30%, under a production sharing contract (PSC) for the upstream segment. Once operational, the project is expected to contribute an estimated 30 billion USD to Vietnam’s GDP and state budget over its lifetime.
Source: VNA