HANOI: Vietnamese company is no longer seeking US 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the United States, a lender run by the US government, said the Vietnamese state-controlled company, PetroVietnam, had withdrawn its application for financial support.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 US companies exporting high-value equipment and merchandise as a way to help companies in the United States win valuable international business. 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 US sanctions since 2014 because of Moscow’s military intervention in Ukraine. On Jan. 26, the US 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. The Ex-Im Bank said in a statement that it had not yet completed its due diligence review of Long Phu 1 when the application was withdrawn. It also did not specify a date for the withdrawal and referred further questions to PetroVietnam.
General Electric said in a statement Saturday that it complies with US sanctions, including those announced by the Treasury Department in January. It added that it was committed to working with its “partners and customers in Vietnam to deliver world-class products and solutions for the power industry.” The New York Times described the Long Phu 1 project and the views of its critics in a Jan. 26 article.