Koreans, Saudis clinch BOT power plant deal

A consortium including ACWA Power, the largest private sector water and power company in Saudi Arabia and Taekwang Power Holdings Company Limited of Korea, just signed a joint development agreement to develop the $2 billion Nam Dinh 1 power plant project.

The consortium will undertake the operation and maintenance of the project with ACWA’s subsidiary Nomac playing an important role, according to a statement by ACWA Power.

Posco E&C from Korea has been selected as a preferred bidder for the engineering, procurement and construction (EPC) of the project.

The Nam Dinh 1 is an independent power project to be developed on a build-operate-transfer (BOT) basis. It is part of the 2,400 MW Nam Dinh thermal power complex in Nam Dinh.

Rajit Nanda, ACWA’s chief investment officer said “This project in Vietnam is really meaningful to ACWA Power; in fact, this will offer a stepping stone for ACWA Power to eventually expand into its strategic markets of the Philippines and Indonesia which have similar cultures and market structures.”

In March 2010, Korea’s Taekwang Power signed a memorandum of understanding with Vietnam’s Ministry of Industry and Trade to develop the Nam Dinh thermal power complex. The 251 hectare power complex project, to be divided into two phases, will be built under the BOT model with the Korean firm operating the 2,400 MW complex within 25 years.

Construction of the Nam Dinh 1 is scheduled to be completed in late 2016, while the remaining of the power complex is expected to come online in 2021. Whether Taekwang Power will go it alone or partner with another investor to develop the second part of the complex is unknown.

The Korean investor was working with state-run Electricity of Vietnam, the sole power buyer in the country, to thrash out a power purchasing agreement for the project, according to sources.

Under existing rules, authorities and the investor will sign a BOT agreement after the latter reach all relevant coal, water, environment, land and power trading deals with local partners.