State-Owned Commercial Banks in Vietnam Exempt from Loan Evaluation for Dung Quat Oil Refinery Project

Strategic Insights -

State-owned commercial banks in Vietnam have been exempted from evaluating the credit-worthiness of the Dung Quat Oil Refinery project, a $2.5 billion endeavor led by the Vietnam Oil and Gas Corporation (PetroVietnam). According to a letter from the State Bank of Vietnam, the four participating banks - Vietcombank, Incombank, Bank for Investment and Development of Vietnam, and Bank for Agriculture and Rural Development - will rely on the report of the State Appraisal Commission instead. The large scale of the project has led to a division of labor among the banks, with each bank only responsible for financing specific aspects of the construction or equipment.

Key Takeaways:

  • The State Bank of Vietnam has issued a letter exempting four state-owned commercial banks from evaluating the credit-worthiness of the Dung Quat Oil Refinery project.
  • The banks will rely on the report of the State Appraisal Commission, citing the project's complexity and technicality as a reason for the exemption.
  • The four participating banks - Vietcombank, Incombank, Bank for Investment and Development of Vietnam, and Bank for Agriculture and Rural Development - will need to supervise the disbursement of loan funds and use of loan proceeds in accordance with financing agreements.
  • The Dung Quat Oil Refinery project is a $2.5 billion endeavor led by PetroVietnam, with a design capacity of 6.5 million tonnes of crude oil per year.
  • The refinery will produce petrol, diesel fuel, fuel oil, liquefied petroleum gas, and kerosene, accounting for a third of the domestic market.

Statistics:

  • The Dung Quat Oil Refinery project has a budget of $2.5 billion.
  • The project covers 338 hectares of land and 473ha of offshore area.
  • The refinery will have a design capacity of 6.5 million tonnes of crude oil per year.
  • The project is expected to produce petrol, diesel fuel, fuel oil, liquefied petroleum gas, and kerosene, accounting for a third of the domestic market.

Sources:

  • Vietnam News Agency (VNA)
  • State Bank of Vietnam letter to four state-owned commercial banks