Vietnam's ENV Puts Together Local and Foreign BOT Projects to Meet Massive $22 Billion Power Construction Targets

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Power plant construction is moving at a rapid pace in Vietnam, where electricity demand has been growing by around 14% per annum for the past ten years. The national electricity output in 2000 went up by 14.6%, in 2001 by 15.4% and in 2002 by more than 17%. All these annual output figures are higher than Electricity of Vietnam's forecasts in the overall development plan for 2001-2010.

At the end of 2002, forecasts were made that the country will need to raise power supply up to 73%, from the current 31.5 billion kWh/year to 53-55 billion kWh in 2005, and then from that base by another 90% to 96-105 kWh by 2010. With electricity shortages due to hit in 2005 a number of new plants are being fast tracked according to the state owned Electricity of Vietnam (EVN). In 2002, EVN initiated construction of three power projects and laid the groundwork for another seven to bring the power output to the 31.5 kWh/year figure.
Projects planned from now through to 2010 call for investment of $22.5 billion with EVN capable of covering only 30% of the capital needs. International investor's build-operate-transfer (BOT) projects have been encouraged and domestic user sectors have been urged to invest in electricity production and supply.

Industrialinfo.com is tracking 46 Vietnamese power plant projects in various stages of development, representing over $21 billion in expenditures. Click on the image at right to view the list of Vietnam Power Plant Projects.

The BBC reported earlier this year that the construction of the country's second 500 kV transmission line linking Play Ku in the Central Highlands and Thuong Tin in northern Ha Tay province is going ahead and is aimed at covering the electricity shortages in northern provinces by 2005. From now through 2020 Vietnam plans to build 60 power plants. This will include 40 plants with a combined capacity of 12,000 MW in the period up to 2010. There will also be 15,000 kilometers of transmission lines and transformers with a total capacity of 50,000 MVA.

In the last month, new major projects have been announced. EVN and Vietnam Construction and Machinery Installation Company have signed a contract to build a new thermal power station in Quang Ninh province, 150 kilometers northeast of Hanoi. The 303 MW from the new plant will supplement the 110 MW coming from an existing 40 year old plant. Russian, Japanese, and Italian machinery will be installed after the EPC contractor has designed and built the infrastructure. Scheduled to start supplying the grid in 2006, the plant will take 800,000 tons of low quality coal per annum form a nearby coal mine creating 1,000 mining jobs. The power will help to avert power shortages in northern regions.

The new natural gas fired plant near Phu My in southern Vietnam will be backed by the Asian Development Bank (ADB) and the World Bank's Multilateral Investment Guarantee Agency (MIGA). ADB will provide a $40 million direct loan and $32 million in political risk guarantees. Risk guarantees of $138 million will be put up by MIGA. The $412 million project will be funded by $103 million from shareholders, Japan Bank for International Cooperation $99 million, $40 million from ADB and $170 million from a syndicate of international lenders.

The 716.8 MW combined cycle plant will use 82,000 mcf/day of Con Son natural gas supplied by PetroVietnam under a 20 year contract for the two gas turbines which will be fronting two heat recovery and steam generation systems and one steam turbine. EVN will buy the plant's output over the same period. There is a 23 year BOT contract between the ministry of industry and the Phu My BOT Power Co which is a consortium of BP, SembCorp Utilities Singapore, Kyushu Electric Power and Nissho Iwai, Siemens AG is the engineering, procurement and construction contractor for the project.

These two projects illustrate the ways and means by which ENV is willing to put projects together to meet their dramatic generating targets. There are also three new hydroelectric power projects due for construction that will supply 2.66 billion kWh by 2008-2010 at a construction cost of around $570. Parallel consumer distribution network contracts are ongoing with EVN already having spent $2 billion 956 kilometers of 220 kV transmission line, 220 kV transformers with a total capacity of 3,271 MVA, nearly 700 kilometers of 110 Kv transmissIon line and 110 Kw transformers with a total capacity of 2,706 MVA.