Foreign capital inflows perked up by multibillion-dollar power plant licensing

A segment of the area that will house Van Phong 1 thermal power plant

According to information published by the Khanh Hoa People’s Committee, Summitomo Group from Japan has been granted the investment registration certificate for its Van Phong 1 coal-fired thermal power plant with a total investment capital of $2.58 billion and capacity of 1,320 megawatts after 11 years of waiting.

In 2006, Sumitomo proposed its interest in developing a 2,640MW thermal power plant on an onshore and offshore area of 350 hectares. The construction would be divided into two phases, with the first carrying an investment capital of over $2 billion. In 2009, the government agreed to Sumitomo to implement the project under the build-operate-transfer (BOT) form.

However, during the process of completing the investment procedure, the investor faced numerous difficulties, especially in the negotiation of the BOT contracts, thus construction works have yet to be kicked off.

Besides, the project required a large area, leading to difficulties in site clearance. Additionally, the long-delay in construction after completing site clearance also made residents extremely anxious.

At present, having received the investment certificate, the investor expects to accelerate completing the remaining procedures so that the construction can be kicked off in early 2018.

Along with Van Phong 1 thermal power plant, two other large-scale thermal power plants received the investment certificate since early 2017. These include the $2.79-billion Nghi Son 2 located in the central province of Thanh Hoa and the $2.07-billion Nam Dinh located in the northern province of Nam Dinh. Both projects would be develop under the BOT format.

Regarding the contribution of thermal power plants to foreign investment capital inflows, for 11 months of this year, the power production and distribution sector ranked second on the list of industries receiving the largest FDI in the country, following the manufacturing and processing sector, with a total investment capital of $8.37 billion, making up 25.3 per cent of total foreign investment inflows.

According to statistics published by the Ministry of Planning and Investment’s Foreign Investment Agency, in the 11 months of this year, Vietnam received $33.09 billion in foreign investment capital, up 82.8 per cent on-year.

Notably, there are 2,293 newly-registered projects worth $19.8 billion, up 52 per cent compared with the same period last year.

1,100 existing foreign invested projects raised their investment capital with the total value of $8 billion, posting a year-on-year increase of 57.6 per cent. Foreign investors also spent $5.29 billion (up 57.6 per cent) buying stakes in local companies.

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