Loan drought dries up project ambitions

April 18, 2011 | 10:23
A dearth of commercial loans has forced state-run Electricity of Vietnam to cut one-fifth of its planned investment for power generation and transmission projects this year.
EVN is struggling to meet the nation’s demand for power

The group’s projected  investment capital for 2011 will be slashed to VND53,300 billion ($2.57 billion), from VND65,875 billion ($3.17 billion), affecting some 300 projects.

EVN’s deputy general director Duong Quang Thanh told VIR that the majority of the affected projects faced difficulties sourcing commercial bank loans this year.

According to EVN, the investment cutback was also part of the implementation of the government’s Resolution 11 dated February 24, 2011 to rein in inflation and stabilise the macroeconomy.

EVN planned to start construction of five power projects this year with an aggregate capacity of 3,830 megawatts, including the 1,500MW Mong Duong 1 thermal power plant, the 1,200MW Duyen Hai 3 thermal power plant, the 1,200MW Vinh Tan 2 extended thermal power plant, the second generator of the O Mon 1 thermal power plant and the 100MW Song Bung 2 hydropower plant.

“For the second generator of the O Mon 1 thermal power project, for example, EVN initially planned to open bidding for its construction this year. Anyway, we decided to delay this work because of the lack of commercial loans and gas supply [to fuel the plant] as well,” Thanh said.

Some other transmission projects, which must be invested in by EVN, to connect with new power generation projects invested by other independent power producers (IPP) have also been delayed this year.

“Those transmission projects must actually finish this year to enable other IPPs’ sources to connect to the national grid when they become operational from next year. However, those generators have been delayed their commercial commission until next several years,” Thanh said.

EVN will also retreat its investment capital in some affiliated joint stock companies, which amount to VND414 billion ($20 million). 

In the first quarter of this year, EVN brought three power generators into commission with a combined capacity of 515MW, including the second generator of the 190MW Song Tranh 2 hydropower plant, the first generator of the 180MW Dong Nai 3 hydropower plant and the 330MW Uong Bi extended thermal power plant.

By Lien Huong

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional