Mitsubishi to plug into BOT power project

Hideyuki Nabeshima, senior executive vice president of Mitsubishi Corporation -  in a meeting with the Ministry of Planning and Investment last week, said the negotiations for Vung Ang 2’s build-operate-transfer (BOT) contract would finish at the year’s end.

“We are in the final rounds and expect to begin the construction next year,” he said. This is Mitsubishi’s first power project in Vietnam and the corporation will take part via a joint venture with Hong Kong’s CLP Holdings, named OneEnergy Asia Limited, in which Mitsubishi will hold a 50 per cent stake. The Vietnamese partner in Vung Ang 2 project is REE Corporation.

In 2007, REE and OneEnergy established a joint venture VAPCO to develop Vung Ang 2 and received approval in principle from the government to develop this project. The project is part of the Vung Ang thermoelectricity power centre in central Ha Tinh province, where PetroVietnam is building another 1,200 megawatt power plant named Vung Ang 1.

Vietnam has a great power sector potential as power demand is expected to grow at up to 22 per cent per annum during 2006-2015. Meanwhile, the power supply is far away behind the demand, putting the country into a severe shortage of electricity in recent years. Though the government has been calling for foreign investments into the power sector, only four BOT power plants have foreign investment so far.

In case VAPCO ends the BOT contract negotiation and receives investment certificate at the end this year or early next year, this will be the third foreign-backed BOT power plant licensed in Vietnam over the past decade, following Mong Duong 2 plant invested by AES Corporation, Posco Power and China Investment Corporation, and Hai Duong power plant invested by Malaysia’s Jaks Resources. The two other projects are Phu My 2.2 and Phu My 3 which were licenced in 2001 and 2002, respectively.

Nabeshima said the Vung Ang 2 would mark a milestone for Mitsubishi to expand investments in the infrastructure sector of Vietnam, which is facing a severe shortage of electricity. “We would like to make long-term investments here,” said Nabeshima.