The plant will sell electricity to national utility Electricity of Viet Nam under a power purchase agreement. — Photo baodautu.vn

WASHINGTON, DC (Biz Hub) — The Multilateral Investment Guarantee Agency, the political risk insurance and credit enhancement arm of the World Bank Group, announced its support to the Hoai Xuan Hydro Power Project in northeastern Viet Nam.

MIGA issued a $239.7 million guarantee to a consortium of lenders led by Goldman Sachs and Bank of Tokyo Mitsubishi to support financing for the design, construction, operation, and maintenance of the 102MW plant in Thanh Hoa Province.

The plant will sell electricity to national utility Electricity of Viet Nam under a power purchase agreement.

Demand for electricity in Viet Nam is expected to double between 2014 and 2020 due in large part to sustained economic growth that has transformed the country from one of the poorest in the world to lower middle-income status within a quarter of a century.

More than 70 per cent of investment in the country's new generation capacity is expected to come from the private sector.

MIGA's support to the power plant is expected to have broad demonstration effects in Viet Nam's hydropower sector, both with respect to future private-sector investments and international environmental and social best practices for such projects.

MIGA's executive vice president and CEO Keiko Honda said, "Viet Nam is diversifying its energy mix to increase energy supply and security, just as it is diversifying its financing sources to create a more secure base for infrastructure development in the future.

"MIGA is glad to play a role." — VNS