October 2, 2023
To: Mr. Nobumitsu Hayashi
Governor
Japan Bank for International Cooperation

Letter of Request

Japan Bank for International Cooperation (JBIC) should forgo support of theBlock B Gas Field Development Project in Vietnam
Friends of the Earth Japan
Mekong Watch
Japan Center for a Sustainable Environment and Society (JACSES)
Kiko Network
Market Forces
Oil Change International
In the face of the accelerating climate crisis, the G7, including Japan, expressed theircommitment in 2022 to "end new direct public support for the international unabated fossil fuelenergy sector by the end of 2022, except in limited circumstances clearly defined by eachcountry consistent with a 1.5°C warming limit and the goals of the Paris Agreement”1. However,the Japan Bank for International Cooperation (JBIC) has continued to finance new fossil fuelprojects even after the G7 commitment was announced in 2022. Halting investment into fossil
fuel projects is essential to mitigate the climate crisis and prevent further loss and damage.
We are deeply concerned that JBIC is currently considering investment into a gas
development project in Vietnam2. The Block B Gas Project spearheaded by Mitsui Oil
Exploration Co., Ltd. (MOECO), a wholly owned subsidiary of Mitsui & Co., is set to constructpipelines to, and develop and produce gas from the offshore Block B gas fields (Block B &48/95 and 52/97)3. We understand that JBIC is considering financing the construction of thepipelines from these gas fields.
The O Mon Power Complex to which the gas will be delivered is scheduled to have four
power plants with a total capacity of 3,810 MW. One of these power plants (660 MW) has
already been built and runs on fuel oil in emergency situations4 but three others are still at theplanning stage. Gas combustion at these large-scale power plants will generate huge amountsof greenhouse gasses for decades to come, further contributing to the climate crisis.
In 2021, International Energy Agency (IEA) indicated that no new oil and gas fields
could be approved for development from 2021 if the world was to reach net zero by 20505. This
1

G7 Leaders’ communique, https://www.mofa.go.jp/mofaj/files/100364051.pdf, 28 June 2022
JBIC, “Projects Already Classified into One of the Environmental Categories and Currently under Screening
Process”, “Natural gas field development project, Socialist Republic of Vietnam, Off the southwestern part ofVietnam, Reference no. 2022-0020”, https://www.jbic.go.jp/en/business-areas/environment/projects/project.html
3Mitsui Oil Exploration Co., Ltd. (MOECO), https://www.moeco.com/en/project/vietnam.html, accessed
September 2023
4
Japan International Cooperation Agency (JICA), FY2018 External Post-Evaluation Report International Loan, “OMon Thermal Power Plant Construction Project (E/S)” “O Mon Thermal Power Plant Mekong Delta Power
Transmission and Substation Network Construction Project (I)~(IV)” “O Mon Thermal Power Plant Unit 2Construction Plans (I), (II)”https://www2.jica.go.jp/ja/evaluation/pdf/2018_VNV-2_4_f.pdf (in Japanese)
5IEA, “Net Zero by 2050 - A Roadmap for the Global Energy Sector”,
https://www.iea.org/reports/net-zero-by-2050, 20212was reconfirmed in IEA's newly published 2023 updated Net Zero Emission by 2050 Scenario6,
as “no new conventional long lead time oil and gas projects are approved for development after2023." The 2023 update further stated that, "the rate of reduction in oil and gas demandnecessary to reach net zero emissions by 2050 is now so fast that it may imply the earlyclosure of some existing oil and gas fields." At the time when even early closure of existing
fields are implicated, the Block B as a new gas project obviously deviates from the pathway to2050 net zero.
Furthermore, this gas is composed primarily of methane, a greenhouse gas 80 times
more potent in Global Warming Potential (GWP) than carbon dioxide over a 20-year span7.
Methane is leaking at various points throughout the gas industry’s supply chain8, andatmospheric methane concentrations have reached record highs9. The IPCC reported that thenext few years will be critical for limiting global warming to approximately 1.5°C, which includes
a significant reduction in methane emissions, by about a third by 203010. In Japan, climatechange is beginning to be recognized as a relevant and urgent issue, as the country has
experienced consecutive days of extreme heat and frequent flooding this summer. Vietnam also
experienced an unprecedented heat wave in May. Both Japan and Vietnam are participants to
the Global Methane Pledge11, thus are aware of the necessity to reduce methane emissions.
There is an extremely urgent need to reduce the use of fossil fuels, including gas, and totransition to alternative energy sources.
On May 15, 2023, Vietnam’s Eighth National Power Development Plan (PDP 8) cameinto effect. In order to fulfill the international commitment to achieve carbon neutrality by 2050,
PDP8 indicated not only the target of 2030 but also of 205012. There are reports of growing
concerns about the possibility of recovering investments from these gas fields, after seeing thetarget of having domestic gas power generation near zero by 2050 and reduction independence on gas power generation after 2031 in PDP813. There are currently significant
delays with O Mon Power Plant Units 2-4, which will likely result in a further shortening of thepayback period for this project.
Vietnam has a population of 98.18 million (2022), a GDP of $366.2 billion USD (2021),
and an installed power generation capacity of 80.7 million kW (2022)14. On the other hand,
Thailand, a neighboring country within the ASEAN region, has a smaller population of 71.69
million (2022), but a GDP of 495.2 billion USD (2022), about 1.3 times that of Vietnam. However,Thailand’s installed power generation capacity is only 42.86 million kW (2022)15, or a little morethan 50% of that of Vietnam. Although electricity shortages have been a longstanding problem in
6

IEA, “Net Zero Roadmap: A Global Pathway to Keep the 1.5°C Goal in Reach - 2023 Update”,

https://www.iea.org/reports/net-zero-roadmap-a-global-pathway-to-keep-the-15-0c-goal-in-reach,
September 2023
7Nature, “Control methane to slow global warming fast”, https://www.nature.com/articles/d41586-021-02287-y,August 25, 2021
8IEA, “Methane Tracker 2021”, https://www.iea.org/reports/methane-tracker-2021, January 2021
9NOAA, “Increase in atmospheric methane set another record during 2021”,
https://www.noaa.gov/news-release/increase-in-atmospheric-methane-set-another-record-during-2021 ,April 7,2022
10
IPCC, “The evidence is clear: the time for action is now. We can halve emissions by 2030.”,
https://www.ipcc.ch/2022/04/04/ipcc-ar6-wgiii-pressrelease/, April 4, 2022
11Global Methane Pledge, https://www.globalmethanepledge.org/
12
JOGMEC, “Briefing on Vietnam’s PDP8” (in Japanese)
https://oilgas-info.jogmec.go.jp/info_reports/1009585/1009795.html, June 2, 2023
13
NNA ASIA, “Huge gas field development approaches deadline O Mon power generation project to start (Part1)” (in Japanese) https://www.nna.jp/news/2524718, June 2, 2023
14
Japan Electric Power Information Center, “Vietnam” (in japanese) https://www.jepic.or.jp/data/asia06vtnm.html
Accessed September 2023
15
Japan Electric Power Information Center, “Thai” (in japanese) https://www.jepic.or.jp/data/asia03thai.html
Accessed September 2023

Vietnam, these figures suggest that there is room for improvement in other areas, such as thedevelopment of the power transmission network, rather than increasing power generation.
Furthermore, southern Vietnam, which the gas from the Block B gas fields is scheduled
to be supplied with, is considered to have high potential for solar, wind, and offshore wind
power16. Providing public funds for gas field development without considering such potential isinconsistent with JBIC's 2018 announcement17 to include investment finance in its global
environment conservation operations, in which JBIC is to identify projects with high global
environmental conservation benefits, such as significant greenhouse gas emission reductions
and it makes difficult to achieve JBIC’s own 2050 net zero portfolio target stated in their ESG
policy18. It is also inconsistent with the Japanese government's G7 commitment as we mentioned
earlier in this letter.
The project is also problematic from a human rights perspective. In Vietnam, multiple
environmental activists have been arrested in recent years, and citizens have been unable tospeak freely about environment and energy policy19. These circumstances suggest that it may bedifficult for JBIC to "involve stakeholders, including local residents and NGOs, who will beaffected by the project," as stated in the JBIC Guidelines for Confirmation of Environmental andSocial Considerations.
Furthermore, in May 2022, the Norwegian Government Pension Fund excluded thePetroleum Authority of Thailand (PTT) from its investments due to human rights violations inMyanmar. This was because of PTTEP’s involvement with the Myanma Oil and Gas Corporation,
which is one of the sources of funding for Myanmar's military, which continues to engage ininhumane acts20. PTTEP Kim Long Vietnam, a subsidiary of PTTEP, is an active member of thisproject. JBIC has a responsibility to strengthen its human rights due diligence by closely
examining whether the investors in this project are complicit in serious human rights violations.
The financing of new gas projects is not compatible with the Paris 1.5 degree goal andcontradicts G7 commitments. We strongly urge JBIC to withhold from financing this project inorder to respond to the climate crisis and to avoid becoming indirectly complicit in human rights
violations.

Contact:
Mekong Watch, info@mekongwatch.org
Friends of the Earth Japan, info@foejapan.org

16

Global Solar Atlas, https://globalsolaratlas.info/, Global Wind Atlas, https://globalwindatlas.info/
JBIC, “Promoting the overseas business having the purpose of preserving the global environment, such as
preventing global warming (GREEN)” https://www.jbic.go.jp/en/information/news/news-2018/0702-011178.html,
July 2, 201818
JBIC, “ESG Policy” https://www.jbic.go.jp/en/information/press/press-2021/1028-015365.html, Oct 28, 2021
19
NPR “Vietnam faces criticism for arresting climate activist as it closes clean energy deal”
https://www.npr.org/2023/06/03/1179728649/hoang-thi-minh-hong-arrest-vietnam-climate-deal, June 3, 2023
OHCHR, Press Briefing Notes “Sentencing of environmental human rights defenders in Viet Nam”
17https://www.ohchr.org/en/press-briefing-notes/2023/09/sentencing-environmental-human-rights-defen
ders-viet-nam, September 29, 2023
20Council on Ethics, The Government Pension Fund Global, “Recommendation to exclude PTT PCL and PTT Oiland Retail Business PCL from investment by the Norwegian Government Pension Fund Global (GPFG) (May 10,2022, Unofficial Translation)”
https://files.nettsteder.regjeringen.no/wpuploads01/sites/275/2022/12/Rec-PTT-ENG.pdf