The Japan Bank for International Cooperation has signed a loan agreement with Vung Ang 2 Thermal Power Limited Liability Company (VAPCO) for the construction of a coal-fired power plant in Vietnam. The  project financing amounting to US$636 million is being provided under JBIC's Growth Investment Facility.

The loan is co-financed with private financial institutions as well as the Export-Import Bank of Korea (KEXIM). The total co-financing amount is US$1.767 billion. VAPCO shareholders include Mitsubishi Corporation.

VAPCO will build, own,and operate an ultra-supercritical coal-fired power plant with an installed capacity of 1,200MW (two units of 600MW each) in the Vung Ang district, Ha Tinh province in central Vietnam. The electricity generated from the plant will be sold to Vietnam Electricity (EVN), the country’s state-owned power utility company, for 25 years.

According to JBIC, the project is seen as one of the concrete initiatives to strengthen cooperation between Japan and Vietnam in the energy field, as addressed in the Japan-Vietnam Joint Statements issued following summit meetings held on June 6 2017 and May 31 2018.

In its Export Strategy for Infrastructure Systems, revised in July 2020, the Japanese government expressed its intention to expand the export of infrastructure systems, including the design, construction, operation, and management of infrastructure, while increasing investments in overseas businesses.

The Vietnamese government has prioritized the improvement of power supply capacity. In 2016 it revised its Seventh Power Development Plan, first unveiled in 2011, in order to promote the construction of power plants and swiftly develop power sources.

JBIC said the VAPCO project is expected to contribute to Vietnam's economic development  by ensuring the stable supply of electricity as a base load power source in the 2020s and beyond.