February 12, 2018 Read More →

U.S. Deal to Support Coal-Fired Generation Expansion in Vietnam Appears Dead

New York Times:

A Vietnamese company is no longer seeking American financial support to build a coal-fired power plant in Vietnam, bringing to an abrupt end a closely watched test of whether Washington would back international projects that could potentially contribute to climate change.

On Thursday, the Export-Import Bank of the United States, a lender run by the American government, said the Vietnamese state-controlled company, PetroVietnam, had withdrawn its application for financial support.

The lender, also known as the Ex-Im Bank, takes on the financial risk for American companies exporting high-value equipment and merchandise as a way to help companies in the United States win valuable international business.

In this case, a green light would have allowed PetroVietnam to purchase millions of dollars’ worth of turbines and other equipment from General Electric, the American manufacturer.

It isn’t clear why PetroVietnam withdrew the application for American financial support for the Vietnamese coal plant, Long Phu 1. But the project, which is already under construction, faced intense criticism inside and outside the United States.

Environmental and other groups said the project would have had a greater environmental impact than reports submitted by PetroVietnam had suggested. More broadly, the application raised the question of whether the Trump administration’s commitment to using more coal at home would extend abroad.

The World Bank and other major institutions have increasingly avoided backing projects supported by developing countries that burn coal and other fossil fuels, which emit greenhouse gases that contribute to climate change. The United Kingdom’s version of the Ex-Im Bank had declined to offer financial support for the Long Phu 1 project for similar reasons.

In addition, the project is partly financed by Vnesheconombank, a Kremlin-connected Russian lender that has been subject to American sanctions since 2014 because of Moscow’s military intervention in Ukraine. On Jan. 26, the United States Treasury Department expanded its Russia sanctions to include Power Machines, a Russian firm that is one of several construction companies with contracts at Long Phu 1.

More: Vietnam Pulls Request for U.S. Help to Build a Coal-Fired Power Plant

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