PRESS RELEASE: IPD AND IRC ISSUED TO DELTA OFFSHORE ENERGY
21 January 2020
ANNOUNCEMENT: DELTA OFFSHORE ENERGY ISSUED INVESTMENT REGISTRATION CERTIFICATE IN BAC LIEU CLEAN ENERGY
On January 21, 2020 following the Investment Policy Decision (“IPD”) by H.E. Duong Thanh Trung, Chairman of the Bac Lieu Province People’s Committee duly authorized by H.E. Trinh Dinh Dung, Deputy Prime Minister of the Government of Vietnam cum Head of the National Steering Committee on Vietnam’s Energy Development, Delta Offshore Energy Pte Ltd (“DOEPL”) has obtained the Investment Registration Certificate (“IRC”) into Bac Lieu Clean Energy Company Limited (“BLCE”). BLCE is the registered owner and Foreign Direct Investment (“FDI”) of the 3200MW Bac Lieu LNG-to-Power Plant Project (the “Project”). The Project was included in Power Development Plan 7 Revised (“PDP7R”) in December 2019. The Project is to be fully implemented by 2027 with the first 750MW CCGT by 2024, if not earlier, in accordance with timelines in PDP7R.
BLCE is the first registered Energy Infrastructure FDI in accordance with Vietnam’s Law on Investment and will be a 100% Foreign Invested Enterprise (“FIE”) upon incorporation. BLCE will implement and represent the collective interests of the commited Strategic Partners to the Investment Project Consortium (the “Consortium”) in the Project. “Firstly we would like to extend our sincerest gratitude and appreciation for the combined efforts of the Vietnam government in supporting the fast inclusion of the Project in PDP7R, the Investment Policy Decision and the IRC under an administrative fast-track program which will influence policy for private sector initiated infrastructure projects in Vietnam”, Ian Nguyen, Managing Director of DOEPL.
The committed Strategic Partners to the Consortium led by DOEPL includes General Electric Company (“GE”), Magnolia LNG LLC (“Magnolia”) and Marsh, Inc (“Marsh”). DOEPL has signed a Memorandum-of-Agreement with GE including the supply of their leading Combined Cycle Gas Turbine (“CCGT”) 9HA.02 technology, a Memorandum-of-Understanding and non-binding Term Sheet with Magnolia on 2 million tons per annum (“MTPA”) over 20 years of LNG supply on an FOB-basis and has appointed Marsh as its risk advisor. The combined expertise, technology and supply from these world-class US companies underpins up to USD 30 billion in exports over the twenty-five (25) year period of the Project which will significantly help balance the bilateral trade and deepen economic interests between the US and Vietnam. In September 2019, the Project was included in the advocacy program of the US Government on its merits of promoting significant US exports to Vietnam.
The Consortium are committed to providing Vietnam affordable, clean and reliable energy security through a long-term bankable Power Purchase Agreement (“PPA”) with offtaker Electricity Vietnam Group (“EVN”). The Consortium expects to complete the development phase within twelve (12) months to achieve Final Investment Decision (“FID”) starting with the feasibility study. The Consortium is committed to implement the project in accordance with the timelines in PDP7R. These timelines are subject to BLCE and the Project receiving all necessary registrations, decisions, certificates permits, approval, acceptances, agreements and licenses required by Vietnam Law and with treatment no less favorably than previous power generation projects.
DOEPL organized a delegation of committed Strategic Partners and interested Strategic Partners to meet with government stakeholders in Hanoi and Bac Lieu Province in January 2020 ending in a ceremony for the issuance of the IRC ahead of the lunar new year. The multinational delegation included over forty (40) representatives from over thirty (30) global industry leading corporations and financial institutions in the LNG-to-Power value-chain included LNG Suppliers, Floating LNG Terminal and LNG Carrier vessel Owner Operators, Independent Power Producers, bulge bracket (top tier) Investment Banks, Private Equity firms, engineering consulting firms, and EPC contractors. The delegation collectively represented over 1m employees globally, hundreds of billions of US Dollars in total revenue and Trillions of US Dollars in total assets thus demonstrating the significant interest by the private sector in LNG-to-Power opportunities in Vietnam..
This new private sector initiated model for energy infrastructure under the Law on Investment is attracting world-class industry operators to compete in de-risking the development and investment in the LNG-to-Power value-chain in Vietnam. The demand driven framework aligns Vietnam’s socio-economic objectives with commercial incentives in a risk-allocated contractual structure (i.e. PPA) in accordance with international common practice. This enables global financial institutions to innovate investment and financing solutions with the most competitive cost of capital. The ultimate end game is a Project that provides affordable, clean and reliable energy to Vietnam through a feasible, bankable and sustainable investment structure for investors.
For further information, contact:
Delta Offshore Energy Pte Ltd
+84 24 393 686 27
Hoa Binh Green City Commercial Centre, 4th Floor
505 Minh Khai, Hai Ba Trung District, Hanoi