KUALA LUMPUR (May 20): Engineering, procurement, commissioning and construction (EPCC) work has yet to begin on Toyo Ventures Holdings Bhd’s (KL:TOYOVEN) thermal power plant project in Vietnam, said Sunway Construction Group Bhd's (KL:SUNCON) stock exchange disclosure on Monday.

The latest disclosure came after The Edge reported in its weekly edition of May 13-19, 2024, that the clock is ticking for Toyo Ventures to secure sufficient financing by the end of June for its 2.12-gigawatt (GW) Song Hau 2 power plant project in Hau Giang province, Vietnam.Toyo Ventures risks the project being terminated if it fails to secure sufficient financial backing by June 30.

Sunway-PECC2 Consortium, a consortium between SunCon and Vietnam’s Power Engineering Consulting Joint Stock Co 2 (PECC2), inked a contract to undertake the power plant’s EPCC work in March 2023, but work has yet to start, said SunCon in the bourse filing.

This, it said, is because the consortium is waiting for the project’s build-operate-transfer firm Song Hau 2 Power Co Ltd (SH2P), a wholly owned unit of Toyo Ventures, to issue the notice to proceed (NTP) to commence works for the project. 

As per an addendum to the EPCC contract inked in October last year, the NTP is proposed to be issued by June 30, 2024. This coincides with Toyo Ventures’ deadline to secure sufficient financing for the power plant project under its BOT contract with Vietnam’s Ministry of Industry and Trade.

Toyo Ventures has maintained the project’s financial close of end-June 2024. The project’s exclusive mandated lead arranger, Export-Import Bank of Malaysia Bhd (EXIM Bank), which was appointed in November 2023, is to arrange the proposed syndicated financing facilities of up to US$2.42 billion (RM11.5 billion) for the project.

Once the NTP is issued, the project is scheduled to be completed in four and a half years.

The project has been a drawn-out affair for Toyo Ventures.

It first submitted a proposal to the Vietnamese government to undertake the power plant project in 2007, before the country decided to go ahead with the current development in 2011.

However, the contract — which carries a 25-year concession — was only executed between Toyo Ventures and the Vietnamese ministry in December 2020.

Shares in SunCon ended 11 sen or 3.4% higher at RM3.35 on Monday, valuing the construction firm at RM4.33 billion. Toyo Ventures closed four sen or 3.64% higher at RM1.14, giving the company a market capitalisation of RM151.5 million.