Vietnam's Vinacomin to Finance 2,600 Megawatts of Power Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Vietnam Coal and Mineral Industries Group (Vinacomin) (Hanoi, Vietnam), the country's top producer of coal, has announced plans to develop two coal-fired power plants with an aggregate generation capacity of 2,600 megawatts (MW). The firm will set up a 2,000-MW power plant in the southern province of Binh Thuan and a 600-MW power plant at Hai Phong near Hanoi. Financial details were not disclosed, but energy experts are of the opinion that the two projects would entail a total investment of more than $3 billion on the basis of development costs of $1.2 million per MW of coal-fired power generation capacity.

Power generated at the 2,000-MW plant at Binh Thuan will be supplied to Vinacomin's bauxite processing complex in the region. Coal for the Hai Phong 3 power plant will be procured from Vinacomin's coalmines in Quang Ninh in the north of Vietnam. The Hai Phong 3 power project is one of the 13 power projects that Electricity of Vietnam (Hanoi) refused to undertake because of the non-availability of loans from banks in the prevalent scenario of worldwide economic crisis. The Ministry of Industry and Trade selected Vinacomin as the investor for the two power projects. Vinacomin will also be responsible for the supply of adequate coal to operate the power plants.

Vinacomin has the right to develop national coal assets in the Red River Delta region of the Quang Ninh province, which has estimated reserves of 30 billion tons of coal. Vinacomin hopes to attract foreign investment to meet its estimated requirements of $13.5 billion of funds to support coal exploration and exploitation projects until 2025. Within this, the firm is seeking funds of up to $5.2 billion for investments from 2008 to 2015. Earlier this month Vietcombank (Hanoi) approved a loan of $72 million to Vinacomin. To date, Vinacomin has invested in eight coal-fired thermal power and hydropower generation plants with an aggregate capacity of 1,600 MW.

Coal consumption in Vietnam currently stands at about 20 million tons per year. Buoyed by demand from the cement, power and steel sectors, domestic consumption of coal is slated to grow by 20% to about 24 million tons per year next year. In view of the expected surge in domestic demand, Hanoi plans to curtail coal exports, primarily to China and Japan, next year by 9% to 20 million tons. It has already curbed exports to 22 million tons this year from 33 million tons last year. Vietnam is witnessing an increase in the number of power plants coming into operation to meet the country's electricity demand, which is expected to grow by 14% next year. Power plants currently consume 6.5 million tons per year of coal and this is likely to increase to 15.3 million tons by 2010. Vinacomin estimates coal output for the current fiscal year to reach 43 million tons, beating earlier industry forecasts of 40 million tons.

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