Jaks close to plugging in power project

>> Jaks Resource gains $2.25 billion power plant licence

The independent power producer last Friday signed build-operate-transfer (BOT) and government guarantee agreement contracts with ministries of Industry and Trade (MoIT), and Finance, respectively for the 1,200 megawatt plant. In addition, it also signed land leasing contract with Hai Duong People’s Committee, power purchasing agreement with Electricity of Vietnam and coal supply agreement with Vietnam National Coal-Mineral Industries Group.

The contract deals, inked two months after Jaks Resources received investment certificate from the Ministry of Planning and Investment, finished three years of negotiations between the investor and the Vietnamese government, the electricity distributor and coal supplier.

“This event set a solid foothold for us to build a power plant in Vietnam,” said Jaks Resources chief executive officer Ang Lam Poah.

The power plant, located in northern Hai Duong province - about 60 kilometres east of Hanoi, has total investment capital of around $2.25 billion.

MoIT Minister Vu Huy Hoang said the contract signing between Jaks Resources and its partners “marks a milestone for Vietnam’s power industry”. “From this time, Jaks Resources will officially play an important role to ease the power shortage in our country,” he said.

Vietnam has a great power sector potential as power demands in country are expected to grow at 17-22 per cent during 2006-2015. However, power supplies are way behind the curve, resulting in severe electricity shortages in recent years. At this time, the growing shortfall is considered as one of foreign manufacturers’ biggest concerns in Vietnam.

Hoang said the government would do its best to help Jaks Resources put the power plant into operation on time. Under the national electricity master plan VII, Jaks Resources will have to operate the first turbine at the end of 2014. The second one will be operational one year later.

Jaks Resources is the fourth foreign investor allowed to build a BOT power plant in Vietnam. Last year, the US’ AES Corporation received investment certificate to build a $1.9 billion BOT power plant in northern Quang Ninh province. The other ones are a joint venture between Japanese Sumitomo Group and TEPCO Company and French EDF Energy with Phu My 2.2 project and a consortium of Kyushu Electric and Sojitz Corporation, BP and SembCorp Utilities with Phu My 3 project.