Vietnam plans to raise $48.8 billion for power projects in 2011-2020

Vietnam plans to invest nearly $50 billion in the power sector in the next 10 years to propel its economy and will issue domestic and international bonds to raise funds for new projects, the Ministry of Industry and Trade said.

Vietnam’s economic growth has been hampered by power shortages during the dry season, although slower industrial production growth and heavy rains have prevented rolling blackouts in the country this year.

Two-thirds of the $48.8 billion raised will be used to build new plants, and the rest will be invested in power-transmission systems, the ministry said in a statement Thursday.

Vietnam will also seek foreign direct investment and official development aid, as well as commercial loans, for the projects, the ministry said.

The country’s total installed power-generation capacity is expected to reach 75 gigawatts in 2020—compared with 21 gigawatts at the end of 2010—with coal-fired plants accounting for 48%.

State-run companies such as Vietnam Electricity Group; Vietnam National Coal & Mineral Industries Holding Corp., or Vinacomin; and Vietnam Oil & Gas Group, or PetroVietnam, will be responsible for building most of the new plants.

Vietnam will speed up negotiations with coal-exporting nations, including Australia and Russia, for deals on long-term and stable supplies, the ministry said. The country’s first-ever coal import shipment of 9,570 metric tons arrived in June from Indonesia.

Gas-fired plants will account for 16.5% of total installed generation capacity by 2020 and hydropower 23.1%, with wind and solar power plants accounting for 5.6% and nuclear plants 1.3%.

State media said last month that Vietnam was negotiating with Russia to borrow about $7.7 billion to build its first nuclear electricity plant, the Ninh Thuan 1 plant in southern Vietnam.

The country has awarded a contract to Russian Atomic Energy Corp., or Rosatom, to build the plant, construction of which is scheduled to start in 2014. It is expected to be operational by 2020.

Power imports, mostly from China, Laos and Cambodia, will equal 3.1% of the country’s total installed generation capacity by 2020, the ministry said.

Vietnam will also seek to open up the power market to encourage the development of new sources. State media said earlier this week that the country will start the process next year.

Power plants with an installed capacity of 30 megawatts or more will have to bid to sell their output to distribution companies from next year. Wind-power plants, plants built under the build-operate-transfer mode, and major hydropower plants Son La, Hoa Binh and Ialy are exempted.

Tags: Vietnam electricity, Vietnam energy, Vietnam power shortage