Vietnam News Agency
February 2, 2001

Electricity of Vietnam (EVN), the cash-strapped state energy monopoly, is seeking additional capital as it pushes to increase power output to meet rising demand state media said Friday.

The firm needs a billion dollars per year to build new power plants and upgrade electricity grids, Vietnam News reported, and it may hike electricity prices by 40 per cent – from 5 cents to 7 cents per kilowatt hours (kwh) – to do it.

“The company may look to international credit organisations to provide loan capital,” the newspaper reported, but a power price hike is likely in order to pay off the expected loans, it said.

Capital requirements may rise to as high as two billion dollars per year by 2005 to keep up with local consumption rates, which EVN general director Dao Van Hung said is rising 13-15 per cent per year.

“Demand may well reach 30 billion kwh this year, but people will definitely have enough electricity,” Hung was quoted as saying.

Power output reached 26.5 billion kwh last year, the paper said, but the communist-ruled state’s development plan envisages 44 billion kwh by 2005, 70 billion kwh by 2010, and 167 billion kwh by 2020.

The latest power projections come as Vietnam seeks to wrap up 800 million dollars worth of power plant deals in the south.

Britain’s BP Amoco Plc and Norway’s Statoil are looking to clinch a 320-million dollar deal on the 700-megawatt Phu My 3 plant.

Another plant, the 471-million-dollar Phu My 2-2, is being negotiated by a foreign consortium led by Electricite de France.

The plant deals were expected to be finished by the end of January.

“Those negotiations haven’t been finished, but we now expect to wrap them up in the next 10 days,” said an official at the Ministry of Industry, which is coordinating negotiations.

These power plants would be dwarfed by a massive hydro-electric power scheme being tabled for the country’s rugged northwest.

The 3,600-megawatt Son La hydro-power plant, in the works for over a decade, received a major boost this week when Prime Minister Phan Van Khai said it carried “very important meaning” for the country.

“The intention to build this power plant is correct. We should not delay it,” Khai was quoted as saying in the Communist Party daily Nhan Dan (The People).

Khai’s implicit support marks a dramatic twist of fate for the project, which seemed all but dead eight months ago when feasibility problems looked set to doom the deal.

About 100,000 people, mainly ethnic minorities, would need to be relocated to make way for Son La’s reservoir on the Da River.