The plants is expected to boost economic growth and attract more foreign investment.
Eleven banks including Sumitomo Mitsui Banking Corp. and Japan Bank for International Cooperation (JBIC) will provide a syndicated loan of $683 million for a fossil-fuel power plant in Vietnam.
According to Nekkei, the JBIC will supply more than $400 million while the rest will come from commercial banks with guarantees from Nippon Export and Investment Insurance. Eight regional banks will lend a combined $100 million.
The borrower, Electricity of Vietnam (EVN), aims to build a coal-fired plant in the south. A part of the money will pay for power-generating equipment made by Toshiba.
Currently, Vietnam is grappling with the shortages of electricity while economic growth is driving electricity demand, making power shortages an urgent concern. This situation hastens the construction of power plants to improving the electricity situation and create a favourable environment to attract more foreign investment.