Phu My 3 BOT Power Company Ltd.

MIGA issued a guarantee of $15 million to Crédit Lyonnais, S.A. of France for its swap agreements related to the financing of Phu My 3 BOT Power Company Ltd. (PM3) of Vietnam—a project involved in the construction, operation and maintenance of a 716.8 MW combined cycle, gas-fired electric generating plant. The swap agreements permit the project to pay a fixed rate of interest on loans rather than a floating rate, which presents financial risk. The guarantee covers a period of 15 years against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract.

MIGA’s coverage of the swap agreements complements its initial support of PM3 in FY03, when it provided $43.2 million in equity coverage and $75 million for a non-shareholder loan. A portion of the guarantees issued by MIGA has been reinsured under the Agency’s facultative reinsurance program.

The project represents one of the largest foreign direct investments ever into Vietnam and is expected to help attract additional private capital investment flows for further infra-structure development in the country. PM3 will also bring many other developmental benefits to the country. Further details about the project—and its development impact—appear in MIGA’s 2003 Annual Report.