Foreign institutions worried about EVN’s $400m debts

The banks and foreign institutions who fund PetroVietnam’s projects expressed their worries about the big debts of $400 million which the Electricity of Vietnam (EVN) owes the national oil and gas group.

In a document sent to the government, ministries of finance, industry and trade, PetroVietnam said EVN owed $400 million debts to the group’s members, equaling to nearly 8.2 trillion dong including 7.682 trillion dong of electricity costs and 422 billion dong of arising interests due to payment delays.

Additionally, EVN owed PetroVietnam 895 billion dong in unpaid costs of Ca Mau 1 and 2 thermo power plants which were prolonged from 2007 to 2009.

PetroVietnam for many times has requested EVN to pay off the above debts. But, the electricity producing group has still delayed payment deadline for which PetroVietnam’s affiliates are being affected negatively. This also caused domino effects to providers of fuel, maintenance and repairing services, banks, credit institutions funding the projects of Nhon Trach 1, Ca Mau 1 and 2.

EVN’s $400 million debts, according to credit institutions, may impact to PetroVietnam’s payment capacity in borrowing contracts.

This was not the first time PetroVietnam sent similar documents to authorities about EVN’s lateness in debt payment. Earlier, other creditors such as Vinacomin, Hiep Phuoc Electricity Co (who sold electricity to EVN) also complained about EVN’s payment delays. Even, Hiep Phuoc producer announced it would cut power if EVN does not pay a $36 million (756 billion dong) debt.

Posted by VBN on Jul 15 2011. Filed under Energy. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry