Vietnam’s build-operate-transfer (BOT) thermal power projects rush to meet target
In spite of numerous difficulties, the investors of four thermal power plant projects under the build-operate-transfer (BOT) model are rushing to start operation and begin generating power for the national grid.
The first is Hai Duong coal-fired thermal power plant invested by JAKS Hai Duong Power Co., Ltd. According to the commitment in the BOT contract, the first turbine is expected to go into operation on December 1, 2020 and the second one on June 1, 2021. As of now, the construction is 93 per cent complete. The total mobilised capital reached $1.40 billion, $1.05 billion of which comes from bank loans while investors’ equity is $350.5 million. The project has been waiting for a license for its slag waste area. Originally, Hai Duong People’s Committee sent a proposal over the license to the prime minister for approval, however, it has been passed on to other ministries which have yet to arrive at a conclusion, delaying the project. In addition, the COVID-19 pandemic also prevented foreign experts and labourers from entering Vietnam and suspended construction activities, putting the project behind schedule and forcing it to miss its pilot and even commercial operation deadline.
At Duyen Hai 2 thermal power plant invested by Malaysian company Teknik Janakuasa, a subsidiary of MMC Corporation Bhd., the first turbine is expected to start commercial operation in June 2021 and the second one in September 2021. At the moment, the construction has been 79.58 per cent completed. The disbursed capital was $968.2 million, $208.2 of which is contributed by investors and $760 million from loans. The construction was impacted by the pandemic. In May and June, the investor sent Tra Vinh People’s Committee a proposal to let 599 experts and labourers enter the country and resume their work at the project. The investor expected the authorities to support these people to return to Vietnam, however, the proposal has yet to be approved.
Regarding Nghi Son 2 thermal coal-fired power project in Thanh Hoa province, led by Marubeni Corporation and Korea Electric Power Company (KEPCO), the new plant would have a total generation capacity of 1,330MW and would help to drive Vietnam’s economic growth and enhance its global competitiveness. The plant is due to be completed and commence operations in 2022. The construction of segments has reached 73.7 per cent and the investors disbursed approximately $956.9 million. Along with the impact of the pandemic, the project is facing numerous difficulties, including import tax, construction to the national power grid, as well as the need to construct segments that are outside the scope of the original investment plan, according to Decree No.40/2019/ND-CP.
Van Phong 1 Coal-Fired Power Plant developed by Van Phong Power Co., Ltd., a Vietnamese company invested by Sumitomo Corporation, was expected to start operations in 2023 with the generation capacity of 1,320MW. To date, the $374.55 million loan was disbursed.