Vietnam Business and Financial News

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Citigroup to help PetroVietnam seek $550 mln loan for plant 2009-10-29 - Bloomberg

Citigroup Inc. will help Vietnam Oil & Gas Group, known as PetroVietnam, source a US$550 million loan for the Nhon Trach 2 power plant in the south of the country, the head of the plant said.

“We have authorized Citigroup to help get money from some local and international banks and Citigroup itself will also give us some funding,” Le Tu Hieu, chairman of the plant’s management board, said by phone from Ho Chi Minh City Thursday. He declined to name other banks involved.

The loan will be for 12 years with a grace period of zero interest in the first two-and-a-half years, according to Hieu. He declined to say how much of the loan Citigroup, the third-largest US bank by assets, would provide.

Vietnam needs more power plants as the government forecasts electricity demand will rise as much as 14 percent annually through 2015. The 750-megawatt, gas-fired Nhon Trach 2 plant is scheduled to start operations in March 2011, Citigroup said in an e-mailed statement Thursday.

“In the wake of the global economic crisis, we can see increased interest among investors and financial institutions to support this kind of critical infrastructure in Vietnam,” Brett Krause, managing director of Citibank N.A. Vietnam, said in the statement.

Citigroup opened its first retail banking branch in Vietnam this month to take advantage of increasing wealth in the $90 billion Southeast Asian economy.

Hanoi-based PetroVietnam, a state-owned company, has moved into electricity generation after Electricity of Vietnam, the country’s biggest supplier, struggled to meet demand.

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