AES plant to boost power supply

July 25, 2011 | 10:00
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AES Corporation and its foreign partners have signed off on the final administrative procedures which will let them kick-off construction of $1.9 billion coal-fired power project next month.
The capital disbursement at Mong Duong 2 will contribute to end the slumping trend of foreign direct investment inflow in the country

The project will not only help raise energy supply but also contribute to improve slumping foreign direct investment (FDI) inflow into Vietnam.

The US firm, together with South Korea’s Posco Power Corporation and China Investment Corporation, signed an adjusted build-operate-transfer contract with the Ministry of Industry and Trade for developing the Mong Duong 2 power plant. With this signing, Posco Power Corporation and China Investment Corporation have officially become stakeholders in the 1,240 megawatt power plant in northern Quang Ninh province.

AES Corporation will hold a 51 per cent stake in the power plant, while the stake of Posco Power Corporation is 30 per cent and China Investment Corporation holds 19 per cent. Former local partner Vinacomin exited Mong Duong 2.

Early this month, a consortium of two Korean

Government   Export  Credit

Agencies and 12 commercial banks, including BNP-Paribas, HSBC, Mizuho and Societe Generale agreed to provide commercial and political risk guarantees and non-recourse debt facilities for the project for over $1.46 billion. 

AES Corporation managing director in Vietnam Ian Fox affirmed the joint venture would start construction of the plant in August, one month later than schedule, contributing to an ease in the electricity shortage in the country where power consumption grows 12 per cent annually but supply is not keeping pace with demand.

The capital disbursement at Mong Duong 2 will contribute to end the slumping trend of foreign direct investment inflow in the country. Statistics from the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, the disbursed FDI in July is $1 billion, making total disbursed fund since January to $7.3 billion. This figure is 1.6 per cent less than the same period last year and July is the second consecutive month net FDI has dropped in Vietnam.

The country’s registered FDI for the first seven months of this year is $9.04 billion, down 24.4 per cent year-on-year. Foreign investors made commitment for 504 projects during the past seven months, a decrease of 33.9 per cent in comparison with the same period last year. FIA said more efforts would be needed to draw FDI from now on to ensure the country’s annual target of $20 billion in registered fund could be reached.

This week, Japanese Honda Corporation will received investment certificate for its $120 million motorbike-manufacturing plant in Ha Nam province.

By Ngoc Linh

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