Czech privately-held Sev.en Global Investments said it will buy a majority stake in a large coal-fired plant in Vietnam from U.S. energy firm AES Corp.
The purchase of 51% of the 1.2 gigawatt Mong Duong 2 will help AES’s plan to divest its coal assets and mark Sev.en GI’s first expansion into Asia, making it a major foreign investor in Vietnam.
The deal confirms a Reuters report on talks over the sale earlier this month.
“After establishing our presence in Europe, North America, and Australia, we are now entering the 4th continent – Asia,” Sev.en GI Chief Executive Alan Svoboda said in a press release.
“As an experienced owner and operator of similar power plants we are proud to take over the operator role from AES.”
AES said the sale would advance its low-carbon goals while it continued to play a role in meeting the country’s growing electricty demand as it develops the Son My LNG terminal and 2,250 MW Son My 2 gas-fired power plant in Vietnam.
The price of the Mong Duong 2 deal, which will close following approval by Vietnamese authorities, was not revealed.
A source familiar with the matter told Reuters that another unnamed bidder representing a consortium of investors had offered around $200 million for the AES stake but was rejected. AES did not respond to a request for comment on that matter.
South Korean energy firm Posco International had planned to sell its 30% stake in Mong Duong 2 in 2021 but a deal valuing the plant at more than $600 million collapsed.
Sev.en GI said it was committed to the plant’s existing build, operate, transfer (BOT) contract, which would see ownership transferred to the Vietnamese state by 2040, a quarter of a century after it began operations.
Ultimately owned by Czech billionaire Pavel Tykac, Sev.en GI has shifted its focus abroad, mainly to the United States and Australia as coal asset prices drop amid a global trend to phase them out.
Tykac, valued by Forbes at $8 billion, told Reuters in May he still saw opportunities in the sector before fossil fuels are abandoned.
Posco told Reuters earlier this month it was again considering selling its stake, while a source close to the deal said Sovereign wealth fund China Investment Corporation (CIC), which owns the remaining 19% stake in the plant, could also sell.
