Plant to help ease dearth of power

AES-VCM Mong Duong Power, a joint investment between US’ AES Corporation (51 per cent), Korea’s Posco Power Corporation (30 per cent) and China’s Investment Corporation of China (19 per cent), kicked-off its coal-fired power plant Mong Duong 2 in northern Quang Ninh province.

This coal-fired plant, which will comply with the Vietnam and World Bank environmental standards, has a net designed capacity of 1,120 megawatts with two units of net 560MW each and is expected to produce approximately 7.6 billion kilowatt per hours annually once fully operational in 2015.

The independent power producer plans to pump approximately $2 billion into this project, which is invested under a build-operate-transfer (BOT) contract with the Vietnamese government. AES Corporation announced that commercial operation of the power facility would start in mid-2015. This plant will be transferred to the government after 25 years of operation.

“This extremely important milestone shows how dedication, hard work and strong cooperation can bring historic results. Through this project, we look forward to making a sustained contribution to Vietnam’s economic growth,” said Paul Hanrahan, president and chief executive officer of the AES Corporation.

AES Corporation estimates about 5,000 local jobs will be created during the peak time of construction.  Once the plant is operational, it will directly employ approximately 200 employees on a long-term basis, the majority of whom will be Vietnamese.

Mong Duong 2 is the second thermal power plant, wholly invested by a foreign investor, has broken ground over the past two weeks, also among the four foreign-invested BOT power plants in Vietnam. On September 9, Malaysia’s Jaks Resources also kicked-off infrastructure work of its $2.25 billion thermal power plant in Hai Duong province.

Once operational, these two power plants will significantly contribute to ease existing power shortages in Vietnam.

During 2006-2010, electricity consumption grew 14 per cent on average, the highest growth in South East Asia , according the Ministry of Industry and Trade. Vietnam's power demand is set to rise by 12 per cent annually over the next 10 years, according to the government’s electricity master plan VII.

The high consumption growth, in line with the slow construction of new power generation projects, put Vietnam into a severe power shortage. This has been forcing Electricity of Vietnam, the country’s sole power distributor, to cut off electricity in shift for three two years.