Probably, a word of selfishness, if you are so fond of the project IRR, shouldn't you do the calculation. I m sure you are more than capable. It doesn't need an accountant to do the job. Icon8888 is not an accountant. I apologise for my harsh words.

sarifah, Vietnam allows only projected IRR of 12% under certain assumed operating conditions to ensure IPP are not overpaid.

To me, nothing is more convincing than Vinh Tan 1's results.

probably, I will appreciate if you can do the job. I m busy.

I m now trying to get back my access to i3

would you like to do the calculation?

I m sure if you exclude the interest cost from Vinh Tan, the project IRR will be far far higher than 15%

If they won't rectify the situation, I might have to say goodbye.

I have informed the Administration

Very inconvenient for me

I m typing using mobile data

My IP address was blocked

I m denied access to i3

Dear All, Bad news !

If you could explain the results of Vinh Tan 1 under the assumption that the interest cost is excluded, then further discussion shall be meaningful.

Vietnam has allowed 75:25 debt ratio as a mean to derive the Project IRR using 6500 hours. Doesn't that include interest cost as consideration?

Don't you find Vinh Tan results more convincing ? If interest is excluded from Vinh Tan, what would the project IRR be ? More than 30%?

Probability, I m absolutely confident that the interest costs is included. It is difficult for me to reply using mobile.

I read somewhere this will improve efficiency

I find it uncommon to attach 2 boilers to a turbine. Maybe that is the cause for slightly higher costs.

Seems like Aseng will now apply premium instead of discount to Vinh Tan 1's results.

OTB, thanks for the information.

hng33, your point is logical but that is assumption too. Only the point on carbon tax is factual. I don't think Vinh Tan 1 has higher amortization as it has similar cost structure.

iswara, mind to share your knowledge on the 3% base ? Thank you
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iswara 1.4b >> interest 42m 3%base
07/05/2020 11:27 AM

This artilce has attracted over 8000 visits ! Must have been heavily shared among friends.

The artilce has attracted over 8000 visits ! Must have been heavily shared among friends.

Jaks Resources - The Most Reliable Earnings Guidance for JHDP

https://klse.i3investor.com/blogs/Jaks%20resources/2020-05-01-story-h1506848575-Jaks_Resources_The_Most_Reliable_Earnings_Guidance_for_JHDP.jsp

What Aseng is saying is "get to the point !"
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Aseng Hng33,

Sorry har.... I read the first sentence sudah beh-ta-han.
Now I will continue reading
Very very sorry har....
07/05/2020 11:17 AM

Yes, these are always the Bankers for international project financing.
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hng33 The financiers for JHDP are the Industrial and Commercial Bank of China, China Construction Bank Corporation and Export-Import Bank of China, same bank panel as Vinh-Tan

After gathering enough points, Aseng can consider writing an article.

The fact that Banks are willing to lend the same amount ( usd1.4b) to all these 3 BOT projects is a reflection of the similarity on the expected earnings from these power plants. - Another strong point for Aseng

I shall amend the article to reflect identical borrowings

Interesting to note that all 3 BOT projects (mong duong II, JHDP, and Vinh Tan 1) borrowed USD1.4b. I suppose that is the amount banks are willing to lend to IPP of 1200MW size. In that case, the interest expense would be the same.

Thanks for the information
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hng33 Vinh Tan 1 thermal power debt financing panel, total USD 1.40 billion (80% financing cost for project cost USD 1.76 billion)

Bank of China: USD233m
China Construction Bank: USD 233m
China Development Bank (CDB): USD 233m
EX-IM Bank of China: USD 234
Industrial & Commercial Bank of China (ICBC): USD 233m
Other Sinosure Bilateral: USD234m
07/05/2020 10:50 AM

Both mong duong II and JHDP are confirmed on 75:25 ratio. It would be very surprising to see Vinh tan 1 on 80:20. This is just words from a manger of Vinh Tan 1. Could there be equity financing included ? I need to look in it.

Anyway, if this is true, it means Vinh Tan 1 has higher interest expense than JHDP which leads to lowered profit.

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When will the Vinh Tan 1 thermal power plant start generating profits?

Operating under the BOT format, the project boasts around $1.75 billion in total investment capital, 80 per cent of which is sourced from a consortium of several international banks. If the project runs smoothly without any hitches, Vinh Tan 1 Power Co., Ltd. will be able to pay off all debts and start generating profits 18 years after the plant starts commercial operation.
07/05/2020 10:33 AM

Hng33, Thank you for the information.

Yes, no carbon tax but there is a threshold on emission. Supercritical has lower emission over subcritical by 3 percentage point.

My understanding is 75:25 is the maximum ratio allowed by Vietnam government, so is the maximum loan tenure of 18 years. I understand that the government cuts short the loan tenure to 15 years for the later BOT project. Could you please substantiate your 80:20 ratio ?

The tax incentive is the same for all earlier BOT projects including Vinh Tan 1 and JHDP. I m not sure whether there was any revision for those newer projects.

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hng33 Dear DK66

Aside focus on comparison between Vinh Tan 1 USD1.75b supercritical plant vs. JHDP USD1.87b subcritical plant ( the net differentiate is minimum given Vietnam government have no carbon tax to incentivize supercritical over subcritical), can you also look at different financing impact on earning. If no mistaken, Vinh Tan 1 is under 80:20 debt to equity financing vs. JHDP 75:25 ratio. In additional, the taxation incentive offer for Vinh Tan 1 vs. JHDP ( tax free for 4year, 5% for next few year , thereafter 10% till end 25 year concession)
07/05/2020 10:14 AM

RM0.70

You probably won't find me writing more articles on earnings forecast for JHDP. It will be extremely hard for me to find better perspective to evaluate JHDP (but I hope not). I shall dig out more on the risk aspects going forward (I hope not too). Wish me luck and don't wish me luck. Haha

I m truly happy with my latest article on profit forecast.

Happy Wesak day !

And Aseng needs not quote me on this point because I think anyone in right mind can understand this logic

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2. No reason Hai Dong used more money to build a lower grade power plant (Dk66)

These are very strong rationale from Aseng not to simply make adjustment on the results of Vinh Tan 1
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Reason :
1. 80% of the net income is derived from capacity payment (Icon8888)
2. No reason Hai Dong used more money to build a lower grade power plant (Dk66)
3. Higher grade plant will have higher O&M expenses

Aseng, You are right.

However, discussion is good regardless of outcome. At least the issue of plant design has been considered.

Can't share link directly to the file. It has to be downloaded to read.

However, You can search in this website
http://www.shclearing.com/xxpl/cwbg/nb/

pjseow, thank you.
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pjseow Let me talk to him. He is very busy with a full time job in Korea. He is afraid that he may not have the time to answer queries.
07/05/2020 12:04 AM

Pjseow, yes he is. We are exchanging emails. No worries. Maybe he can consider posting an article for the benefit of everyone here ?
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pjseow DK66, I supposed my son Jonathan is one of the 3 asking you some questions privately. He came up with a spreadsheet detaling the earnings , cash flow etc for 25 years with some assumptions mainly from your previous articles. Hope you can help to clarify some of his questions. His spreafsheet also seperate.capacity payment and energy payment. Thanks
06/05/2020 11:47 PM

Also, I don't think I will get any response from good people like RangerJ if I m a nasty person and never shared in i3. Am i right, bros ?

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Stock: [JAKS]: JAKS RESOURCES BHD

May 6, 2020 12:59 PM | Report Abuse

Hi DK66, Very kind words, thank you. As icon8888 mentioned, there is reliability (availability) guarantee on top of efficiency guarantee. Efficiency is not constant, as there will be degradation over the PPA period. Personally, I won't lose sleep over these matters at this point. Wishing you all the best. Thank you.

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DK66 I m grateful that you created a new ID just to relay the information to us. Really appreciate that.

Do you have information on the effect of efficiency of power plant on earnings ?

06/05/2020 1:06 AM

These are very smart people and I m glad that they are sharing their insights with me. I suppose this is the good karma I got from my sharing in I3.

Many are busy coming up with their own estimates and projections. I m currently answering to 3 of them privately through emails.

I suppose the close proximity of plant COD is drawing a lot of interest lately.

Just a final word. If it only costs Vinh Tan 1 USD1.75b to build a supercritical plant, why would JHDP not build a supercritical plant but instead paid USD1.87b to build a subcritical plant ?

Won't JHDP be interested if the profit differential is so big ? or there are other costs to be concerned with ?

I just do not know.

elbrutus, yes, I should stop. Thank you

Probability, I am an accountant. I search the internet for information and I constantly found new information. In fact, both vinh tan 1 and JHDP are using CFB technology which is a dominant technology of china. Generalized average data should not be used as a guide. As I have said, I do not wish to carry on. This topic is really beyond my expertise.

VIN3133, I know you are saying this to make me feel better but I cannot agree on this. I treat everyone here equal. I do appreciate probability's contribution here though we disagree on many fronts.

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VIN3133 Dear bro DK66 , if the person is uncle KYY equivalent , then i would say it is worthwhile taking up the challenge !!