Power plant seeks jump- start by foreign investors

The investor in Kien Luong 1 power plant is courting partners from Korea, Japan and Australia
Photo: Le Toan

Tan Tao Investment and Industry Corporation (ITACO) recently signed a memorandum of understanding on developing the BOT (build-operate-transfer) project with the Ministry of Industry and Trade, paving the way for the beleaguered project’s resurgence following six years of financing trouble.

ITACO’s general director Thai Van Men said that foreign investors from Korea, Japan and Australia were interested in collaborating to develop this project.

Under the latest MoU, Kien Luong 1 is scheduled to start generating power by February 2025. The plant will have two generators with the combined capacity of 1,200 megawatts with the total investment capital of more than $2.4 billion, and it will be located in Kien Luong district in the Mekong Delta province of Kien Giang. The coal-fired plant is a pivotal part of the southern region’s economic development and national energy security over the years to come.

Licensed in January 2008, the local private industrial developer ITACO planned to build the Kien Luong power and port complex, approximately 300 kilometres south of Ho Chi Minh City, with the total generation capacity of up to 4,400-5,200MW and the total investment capital of $6.7 billion. However, ITACO could not keep the plan on track for its commercial operation deadline of 2018. The main reason for the delay was the group’s trouble in mobilising funds for the project.

Last year, to address the investor’s problem and get the project back up and running again, the Vietnamese government allowed ITACO to modify its investment model from build-own-operate (BOO) to BOT, so that it could receive government guarantees to help it realise the project.

Lam Thanh Hung, deputy director of the Kien Giang Department of Industry and Trade, told VIR that the revival of the Kien Luong thermal power plant would play a key role in managing the power demand in the vast Mekong Delta region.

In addition to this project, the Vietnamese government has recently given the nod to state-run oil and gas group PetroVietnam to develop a gas-to-fertiliser complex in Kien Giang. PetroVietnam will use natural gas as fuel for the complex, instead of coal. This follows the group’s complete acquisition of Chevron’s Vietnamese offshore assets and rights in gas developments in June this year, namely blocks B, 48/95 and 52/97.