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Nghi Son 2 coal power plant Vietnam
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On record

This profile is no longer actively maintained, with the information now possibly out of date

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Created on: 2018-02-15 09:35:25
Last update: 2020-08-11 00:00:00

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Aerial view of Nghi Son 1. Photo: Courtesy of Google Maps/Google Earth
Sector Coal Electric Power Generation
Location
Status
Planning
Design
Agreement
Construction
Operation
Closure
Decommission
This project has been identified as an Equator Project

About Nghi Son 2 coal power plant

Nghi Son 2 is a coal-fired power plant currently under construction in the Tĩnh Gia district, Thanh Hoa province in Vietnam. Nghi Son 2 is being constructed next to the existing power station Nghi Son 1. It will consist of two turbines, each with a capacity of 600 megawatts, and will be developed by a consortium consisting of Marubeni Corporation and Korea Electric Power Company (KEPCO). The project will use supercritical technology and the emissions intensity has been estimated at 890-900g CO2/kWh. It will be fuelled by anthracite coal from the Hon Gai – Cam Pha coal mine in the Quang Ninh province of Vietnam. 

Latest developments

Nghi Son 2 coal power plant started commercial operation

2022-07-14 00:00:00

Construction halfway, Nghi Son 2 to be commissioned in 2022

2020-02-14 00:00:00

Why this profile?

The Nghi Son 2 coal-fired power plant will adversely impact both people and planet. The coal power plant will emit two times as much CO2 for every unit of power generated compared to the average power plant in Vietnam, negatively impacting public health and worsening climate change. 

What must happen

The Vietnamese government should stick to its Paris Agreement goals and withdraw their permission to build new coal-fired power plants. This step was already announced in January 2016 by Prime Minister Nguyen Tan Dung, however, it should also include Nghi Son 2. Banks and financial institutions should avoid financing the plant and implement policies to withdraw any finance for new coal plants. The finance should be redirected to more sustainable, decentralized renewable energy.

Impacts

Social and human rights impacts

Coal-fired power generation in Vietnam is already a significant threat to public health, and the construction of the Nghi Son 2 plant will further expand already existing problems. A 2017 study by Harvard University has estimated that air pollution from similar existing plants is responsible for 4,300 premature deaths in 2011. The same study has also estimated that by 2030 there will be 19,220 excess deaths per year due to coal pollution in Vietnam. Social issues will also result from the adverse effects on local farming land and aquaculture.

The air pollution impacts of coal power plants including Nghi Son 2 pose serious risks for the health and life of local people, especially children. For example exposure to pollution of CO2, mercury and arsenic can lead to lung injuries, nerve diseases and cardiovascular infections.

Environmental and climate impacts

The Nghi Son 2 power plant will emit double the CO2 per unit of power generated than the average power plant in Vietnam. It will use outdated supercritical technology, which has an estimated efficiency rate of 38.5% compared to 43.3% for the more advanced ultra-supercritical technology. It will emit roughly 10 times as much SOx as power plants using ultra-supercritical technology. The emission of SOx, combined with the emission of fine dust, NOx, CO2 and mercury will severely impact the air quality. The support of supercritical technology is against policies of the Japanese government to which JBIC must adhere. 

The methodology for drafting Environmental Impact Assessments is flawed, which has led to pollution in the past. Minister for Resources and Environment, Hong Ha, has said that “current regulation on EIA has proved unfeasible, making it hard to have high-quality EIA reports”. The EIA released by JBIC earlier this year has already been conducted 2015 and is therefore out of date and has not been acted upon expeditiously. 

Local aquaculture will most likely be affected because of the use of sea water for cooling and the discharge of heated water back in the sea.

Other impacts

In May 2016 a study was published by the Vietnam Sustainable Energy Alliance (VSEA), in cooperation with the WWF, according to which Vietnam can receive 100% of its electricity demand from renewable energy.

Governance

Bank policies

The following bank investment policies apply to this project:
Sumitomo Mitsui Banking Corporation (SMBC)
csr policies
2020-04-16 00:00:00

Revision of ESG financing policies

2020-04-16 00:00:00 | Sumitomo Mitsui Banking Corporation
csr policies
2021-01-14 00:00:00

Management of environmental risks

Date listed represents date as accessed on website
2021-01-14 00:00:00 | Sumitomo Mitsui Financial Group
OCBC Bank
csr policies
2019-12-18 00:00:00

Responsible financing

Date listed represents date as accessed on website
2019-12-18 00:00:00 | OCBC Bank
csr policies
2020-12-10 00:00:00

Climate change statement

Date listed represents date as accessed on website
2020-12-10 00:00:00 | OCBC Bank
DBS
csr policies
2019-04-24 00:00:00

Statement on financing new coal-fired power plants

2019-04-24 00:00:00 | DBS

Applicable norms and standards

Equator Principles
Principles for Responsible Banking (PRB)

Timeline

Nghi Son 2 coal power plant started commercial operation

2022-07-14 00:00:00

On July 14, the investor of Nghi Son 2 BOT Thermal Power Plant officially started commercial operation of the entire plant with a capacity of 1,200 MW in accordance with the schedule and plan.

Construction halfway, Nghi Son 2 to be commissioned in 2022

2020-02-14 00:00:00

In February 2020, the National Steering Committee for Power Development reported that construction of the Nghi Son 2 coal-fired power plant is 52.35% complete. It was also reported that the first unit is scheduled to be commissioned in February 2022, and the second unit in August 2022.

OCBC Says Coal Plants It's Financing in Vietnam Will Be Its Last

2019-04-16 00:00:00

OCBC Bank announced it will not finance any new coal-fired power plants. Unfortunately, the banks keeps committed to the projects it already committed to in Vietnam such as Nghi Son 2. Read the article here.

Tohoku Electric buys stake in Nghi Son 2

2019-03-27 00:00:00

In March 2019, Tohoku Electric Power was reported to buy a 10% stake in the Nghi Son 2 coal-fired power plant. The transaction is subject to Vietnamese government's approval.

Doosan has started construction on Nghi Son 2

2018-07-26 00:00:00

According to Pulse News South Korea’s Doosan Heavy Industries & Construction Co. has finally commenced the delayed construction of Nghi Son 2 after it received an advanced payment of USD 170 million for a USD 1.6 billion deal it won in 2014. 

The project exists of two 665 megawatt thermal power generation plants in the city of Thanh Hoa. Doosan, Korea’s largest power plant equipment maker, will aim to complete the construction by July, 2022. 

Financial close reached on project

2018-04-19 00:00:00

The 1,200 megawatt Vietnam coal plant gets funding, but Standard Chartered pulls out over climate policy conflict. The London-headquartered bank withdrew from the USD 1.87 billion coal-fired power plant’s financing consortium, but eight other banks, including Singapore’s OCBC and DBS and Malaysia’s Maybank, ensured the deal was closed (eco-business.com).

Financiers

The project requires an investment of approximately USD 1,869 million. The project sponsors, KEPCO and the Marubeni Corporation will finance the project on a 81:19 debt to equity ratio. Both KECP and Marubeni provide USD 216 million in equity.

In terms of debt, JBIC has signed a loan agreement for USD 560 million in project finance, as did KEXIM (source: IJGlobal).

Besides the loans provided by JBIC and KEXIM, a syndicate of commercial banks has provided a total of USD 748 million in project finance (source: IJGlobal). These banks include: DBS Bank, Mizuho, Maybank, MUFG, OCBC, Shinsei Bank and SMBC. JBIC and KEXIM provide political risk guarantee for the portion of the loan financed by private financial institutions.

SMBC acts as financial advisor.

Standard Chartered, which was initially listed as one of the co financiers of the project, withdrew from the final deal, with indications that this was because the project was in violation of its policies. 

Related companies

The Nghi Son 2 project is sponsored by KEPCO, Marubeni Corporation and Tohoku Electric Power.

KEPCO - Kansai Electric Power Corp. Japan

Sponsor for 50% of the project

Marubeni Japan show profile

Coal Electric Power Generation | Mining | Pulp, Paper and Paperboard Mills
Sponsor for 40% of the project

Tohoku Electric Power Japan

Sponsor for 10% of the project

News

| |
Type:
Year:
blog
external news
our news

Will Vietnam’s new energy policy mark a turning point for coal?

2020-07-22 | Eco-Business
blog
external news
our news

OCBC Says Coal Plants It's Financing in Vietnam Will Be Its Last

2019-04-16 | Bloomberg
blog
external news
our news

Major banks are failing Vietnam by violating Equator Principles commitments in financing coal power projects

2018-10-11 | Market Forces
blog
external news
our news

Local NGOs push Singapore banks on coal: Stop using our money to fuel climate change

2018-07-12 | Eco-Business
blog
external news
our news

Asian banks ignore environmental warnings to fund Nghi Son 2

2018-04-26 | Global Trade Review
blog
external news
our news

1,200 megawatt Vietnam coal plant gets funding, but Standard Chartered pulls out over climate policy conflict

2018-04-19 | Eco-Business
blog
external news
our news

Japanese banks betray their commitments and the environment by funding more dirty coal

2018-04-18 | Market Forces
blog
external news
our news

Japanese banks betray their commitments and the environment by funding more dirty coal

2018-04-18 | Market Forces
blog
external news
our news

Suffering downstream of polluting coal plants

2018-03-14 | VietNamNet
blog
external news
our news

Standard Chartered ‘breaching climate policy’ with Vietnam coal plant investment

2018-02-14 | Climate Home News
blog
external news
our news

Nghi Son 2 coal-fired set for financial close by March

2018-01-31 | IJ Global
blog
external news
our news

Concession contracts signed for Nghi Son 2 coal-fired plant

2017-11-10 | IJ Global
blog
external news
our news

Nghi Son 2 thermal power plant to be kicked off by year-end

2017-07-13 | Vietnam Investment Review
blog
external news
our news

JBIC and Kexim to join bank syndicate on Nghi Son 2 coal-fired

2017-07-07 | Trade Finance
blog
external news
our news

Signing the Agreement for investment in Nghi Son 2 BOT Thermal Power Project

2016-11-16 | Nangluong Vietnam
blog
external news
our news

Comment: Vietnam’s coal decision is the Paris Agreement in action

2016-01-15 | Unearthed

Links

Japan: No More Coal! (directed at JBIC)

http://eco.climatenetwork.org/cop23_cmp13_cma2-eco11-5/

JBIC should reject finance for Nghi Son 2 coal fired power plant project in Vietnam

http://www.foejapan.org/en/aid/pdf/180313.pdf

Market Forces - Nghi Son 2 profile

https://www.marketforces.org.au/research/vietnam/nghi-son-2/

Global Energy Monitor - Nghi Son 2 profile

https://www.gem.wiki/Nghi_Son_power_station

Brief history

  • In March 2013, the Vietnamese Ministry of Industry and Trade awarded a contract to build Nghi Son 2 to a consortium consisting of the Marubeni Corporation and the Korea Electric Power Company (KEPCO). The power station was scheduled to come online in 2018. 
  • The Environmental Impact Assessment was completed on February 5, 2015.
  • In November 2016, Vietnam’s Ministry of Industry and Trade approved a new contract for Marubeni and KEPCO, after construction had not started as scheduled. The project cost was estimated at USD 2.3 billion, 50% coming from Marubeni & KEPCO, and 50% coming from a consortium of banks. The first unit was scheduled to come online by September 2019 and the second by March 2020.
  • In June 2017 the investment license was issued.
  • In November 2017 KEPCO finalized the USD 2.3 billion power purchase contract with Electricity of Vietnam. KEPCO said the project will be completed in 2021.
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