The Japan Bank for International Cooperation (JBIC; Governor: HAYASHI Nobumitsu) signed on July 5 loan agreements with MOECO Vietnam Petroleum Co., Ltd., MOECO Southwest Vietnam Petroleum Co., Ltd., and MOECO Southwest Vietnam Pipeline B.V., all of which are invested in by Mitsui Oil Exploration Co., Ltd. (MOECO), amounting to up to approximately USD167 million, approximately USD161 million, and approximately USD87 million, respectively (JBIC portions). The loans are co-financed with private financial institutions, bringing the total co-financing amounts to USD335 million, USD322 million, and USD175 million, respectively.
The loans are intended to provide the necessary funds for MOECO to develop the Block B gas field located off the southwest coast of Vietnam and build pipelines to transport fuel gas to thermal power plants in the southwest area of the country, by cooperating with its business partners, Vietnam Oil and Gas Group (PVN) and PTT Exploration and Production Public Company Limited of Thailand.
Natural gas, which produces less greenhouse gases than other fossil fuels, is attracting attention as a source of energy during the energy transition toward the realization of a decarbonized society and carbon neutrality. The government of Vietnam announced its goal to achieve carbon neutrality by 2050 and formulated the Power Development Plan 8 (PDP8) in May 2023. The PDP8 aims to reduce the proportion of coal used for power generation and to use domestic gas and LNG as power sources in the transition period. The project, with the participation of MOECO, which has achievements in and knowledge of gas field development, covers the whole development process from the development of domestic gas production to the establishment of pipelines that connect the gas field and the power plants. The loans will not only support the resources development by a Japanese company, but it will also contribute toward the energy transition in Vietnam.
In January 2022, the government of Japan proposed the concept of Asia Zero Emissions Community (AZEC), a framework to provide support and cooperation for the efforts for energy transition by Asian countries by leveraging the strengths of Japanese companies, such as technology and know-how. Vietnam is an important partner country in the AZEC framework and the loans provided by JBIC are in line with the policy of the Japanese government.
JBIC will continue to financially support the overseas resources development by Japanese companies and the global energy transition.
