Sembcorp powers up plant proposal

photo source: pve.vn

According to Quang Ngai Provincial People’s Committee, Deputy Prime Minister Hoang Trung Hai in a document released early this month approved Sembcorp Utilities’ project to be added in the strategy and allowed the firm to develop the power plant under the build-operate-transfer (BOT) investment form.

A Dung Quat Economic Zone Management Authority source said the provincial authorities would cooperate with relevant ministries for guiding Sembcorp Utilities to complete necessary administrative steps.

“This is an important milestone for this project. Sembcorp Utilities cannot develop this power project unless the Vietnamese government adds it into the nation’s power development strategy,” said the source.

Sembcorp Utilities, a subsidiary of Sembcorp Industries, announced its plans to study the feasibility of this project in September 2011. In January 2012, the investor signed a memorandum of understanding with Quang Ngai authorities for conducting the study.

The 1,200MW power plant, to be located in central Quang Ngai province’s Dung Quat Economic Zone, will significantly enhance the central region’s power supply. 

But to secure an investment certificate for this project, Sembcorp Utilities must finish negotiations with Electricity of Vietnam (EVN) and the Ministry of Industry and Trade (MoIT) for power purchase agreements and a BOT contract that could take several years.

This is the second Sembcorp power project in Vietnam. Ten years ago, the Singaporean investor, in a partnership with Kyushu Electricity, Sojitz Corporation and BP, invested in the 749MW Phu My 3 power plant in southern Ba Ria-Vung Tau province.

So far, only four BOT power projects have been licenced to foreign investors in Vietnam - Phu My 3, Phu My 2.2, Hai Duong and Mong Duong. Some other foreign investors are in negotiations with the MoIT and ENV for building BOT power projects in Vietnam, such as Sojitz, Mitsubishi, Sumitomo and South China Grid Corporation.