Nghi Son 2 thermal plant finally starts construction in second quarter

May 15, 2018 | 10:56
After being delayed for numerous times, the construction of Nghi Son 2 thermal power plant is expected to be kicked off by the end of this quarter. The progress is thanks to the investor mobilising the majority of the required capital for the project.   
nghi son 2 thermal plant finally starts construction in second quarter
Nghi Son 2 will joing the likes of Phu My 2 thermal power plant

Most recently, Japan Bank for International Cooperation (JBIC) released the information that it signed a $560-million loan agreement to finance the project with Nghi Son 2 Power Limited Liability Company (NS2PC), the investor of Nghi Son 2 thermal power plant, which is a consortium of Japanese company Marubeni Corporation and Korea Electric Power Corporation (KEPCO).

The purpose of the loan is to support an overseas infrastructure project in which the Japanese company participates as an investor, as well as to operate and maintain a power plant over a long period of time, using advanced Japanese technologies. This loan thereby contributes to maintaining and strengthening the international competitiveness of Japanese industries.

Along with the loan from JBIC, NS2PC also called loans from the Export-Import Bank of Korea (KEXIM), Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd., Mizuho Bank, Ltd., Shinsei Bank, Ltd., Oversea-Chinese Banking Corporation, Ltd., DBS Bank, Ltd., and Malayan Banking Berhad.

The total co-financing amount is valued at $1.87 trillion. JBIC and KEXIM provide political risk guarantee for the portion of the loan financed by private financial institutions.

The project will be developed under the build-operate-transfer (BOT) format and have the installed capacity of 1,200MW, produced by two units of 600MW each. The electricity generated from this plant will be sold to Electricity of Vietnam (EVN) for 25 years.

Earlier in June 2017, the Ministry of Planning and Investment granted the investment certificate for the investor. The project's capital was estimated at $2.8 billion. According to the initial plan, the construction of the plant should have started by the end of last year, but failed. The reason for the delay may be the difficulties in arranging capital on the side of the investors.

The country now has 18 BOT thermal power projects. Some of them have been put into operation, including Phu My 1, 2, and 3 thermal power plants.

According to the latest information, the $1.75-billion Vinh Tan 1 thermal power project, the largest Chinese-invested project in Vietnam, will come into commercial operation ahead of schedule after concerns of potential power shortages in the southern provinces in the time to come.

Notably, its first unit will come into commercial operation in July 2018, five months earlier than initially scheduled. Previously, on April 18, 2018, the first unit of Vinh Tan 1 was successfully connected to the national grid and met all standard requirements during the testing as well as operation.

Vinh Tan 1 is expected to provide more than 7.2 billion KWh per year, increasing the southern region's electricity supply and helping reduce the region's dependence on hydropower—especially during the dry season or droughts.

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