Vietnam's 10% Annual Growth in Power Demand Drives New Project Strategy

Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Nearly 50% of Vietnam's electrical power supply is generated from hydropower, but due to weather conditions and other factors, there is a pressing need for a more stable source of power. Traditional thermal and nuclear power station projects, that are now in the pipeline are part of a strategy to correct this imbalance of power sources.

Electricity demand in the country is expected to increase at the high rate of 10% annually in the coming years, driven by rising population numbers and economic growth. Southern Vietnam in particular, the country's largest economic bloc, which includes Ho Chi Minh City, faces a critical situation in relation to the current imbalance between existing supply and increasing demand for electricity. There is an urgent need for the development of new and additional power generation infrastructure in the region.

The latest addition to the power project pipeline is a 1,200-megawatt (MW) plant to be sited in Vinh Tan in Binh Thuan province, for which completion of the first 600-MW unit is scheduled for 2017, to be followed by the second 600-MW unit in 2018.

Mitsubishi Corporation (MC) (OTC:MSBHF) (Tokyo, Japan), together with Doosan Heavy Industries & Construction (KSX:034020.KS) (Changwon, South Korea) and Vietnamese partners Power Engineering Consulting Joint Stock Company 2 and Pacific Corporation, have signed a contract with state-owned Vietnam Electricity to build the coal-fired plant.

Under its recently released New Strategic Direction, MC seeks to accelerate global business development by leveraging the shift towards Asian markets. As building multiple robust and large-scale earnings drivers is also part of the company's business strategy, MC intends to pursue other power generation-related business opportunities in the future.

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