The Asian Development Bank (ADB) has approved a loan of $309.89 million for a new 750 megawatt (MW) gas-fired power plant in Viet Nam that will provide critically needed electricity to the country’s energy-starved south.
“Viet Nam’s power consumption has been growing 15% a year over the past decade, and will continue rising at a double-digit pace for the foreseeable future,” said Anthony Jude, Director of ADB’s Energy Division for Southeast Asia. “Viet Nam desperately needs more electricity, and the additional power supply will support economic and social development in the Mekong Delta.”
Electricity has fueled Viet Nam’s dramatic economic expansion over the past decade, helping slash the number of people living in poverty from 58% in 1993 to 13% in 2009. The growing demand for power has put a strain on existing generating capacity, however, resulting in power shortages and unstable supply during the dry season.
The O Mon IV plant will provide a more reliable supply of power to the Mekong Delta, support expanded industrial activity, spur new livelihood opportunities, and reduce dependence on hydroelectricity tapped from other regions. It is aligned with Viet Nam’s power sector development plan, which aims to more than triple energy capacity from 18,500 MW in 2010 to 60,000 MW by 2020.
The new combined cycle gas turbine plant is one of four being developed at the O Mon thermal power complex in Can Tho province, about 250 kilometers south of Ho Chi Minh City.
The project will save approximately 600,000 tons of carbon dioxide emissions a year compared to coal-based alternatives, possibly qualifying the facility for carbon credits.
O Mon IV, which is due for completion by June 2016, is projected to cost $793.5 million. Germany’s KfW Bankengruppe will contribute $370 million, with state-owned Electricity of Viet Nam (EVN) and the Government of Viet Nam together providing almost $113.6 million.
A second plant at the complex is to be bid out to private investors, while the Government of Japan is funding two others in conjunction with EVN.
The complex, which will have 3,600 MW of generating capacity when complete?will also support the development of Viet Nam’s offshore natural gas reserves, with a consortium of foreign and local oil companies tapping one block in the Gulf of Thailand to supply the O Mon facility.
ADB has played a leading role in developing Viet Nam’s power infrastructure, with six sovereign loans totaling over $1.7 billion, two private sector loans worth $90 million, and associated guarantees of $60 million.