Serving as a $1.8 billion thermal power station, Vietnam's Long Phu 1 is a coal-fired power plant that will produce approximately 5.4 million tons of carbon dioxide a year, with the potential to power millions of homes.
Vietnam is already getting help from the Russians through a bank connected to the Kremlin, and now all that is left is to obtain aid from the U.S. The combination of these two forces seems very likely as they attempt to battle China's growing influence in Southeast Asia, waging an underlying arms race of sorts.
The plant has applied for assistance from the Export-Import Bank of the United States. The project will require millions of dollars' worth of turbines and other equipment from General Electric (NYSE: GE), to be funded by American taxpayers.
"Our work on the Long Phu project supports the Vietnamese government's goal of bringing power to approximately four million Vietnamese people, while also supporting hundreds of U.S. jobs," said Una Pulizzi, a General Electric spokeswoman.
Committing to the project would be in accordance with the Trump administration's aim of using more coal domestically, as well as extending the trend overseas. Apparently, Trump's push towards such projects has resulted in the Export-Import bank being set to spend billions of dollars on fossil fuel projects abroad, including $14 billion on pending oil and gas projects.
However, a slew of stakeholders, such as Friends of the Earth International, have been strong and vocal proponents of the the notion that the U.S. and financial institutions like the World Bank should stop funding high-polluting energy projects in developing countries.
One of the regulations in place that such stakeholders use as grounds to protest includes the OECD coal agreement, which places restrictions on coal plant financing. Both FOE and Bruce Buckheit, the former Senior Counsel in the U.S. Department of Justice's Environmental Enforcement Section, have criticized the project sponsor's claim that the plant is critical enough that it should be excepted from the OECD coal agreement. They also have refuted the sponsor's claim that the plant will be efficient.
If the U.S. proceeds to back the project, they would be uniting forces with a Russian bank that hasbeen sanctioned by the United States government since 2014 because of Moscow's military intervention in Ukraine. While the union may seem awkward, it could potentially help repair relations between the two countries, amplify the economic presence of each in the region.
The consensus on this project within the Ex-Im Bank itself is still unclear. In a statement, the bank said it was reviewing the application to determine whether it complied with international rules and the bank's environmental policy.
Additionally, Tata Power Co. Ltd (NSE: TATAPOWER) has also committed to the project, promising to complete it three years early on a build, own and transfer basis.