6 September 2005 - Vietnam's state power utility Electricity of Vietnam is to spend $1.65bn over the next five years building power plants with capacity of 2300 MW in order to alleviate a shortage of electricity, which this year was exacerbated by low hydropower resources.

Vietnam currently has electricity generating capacity of 8.3 GW and has long-term plans to develop a competitive power market.

EVN, which failed to meet the hiked demand this summer due to a drought that drained the hydroplant reserves and is forecasting a similar problem will arise from 2006-10.

While accelerating the Uong Bi thermal power plant's construction to finish it and be operating by March 2006, EVN will build 18 steam turbines to put out a further 37 MW in 2006-07.

From 2007-08, EVN will build an additional eight steam turbines and two boilers, putting out another 1320MW, and will build a gas thermal power plant with a 600 MW annual output by 2008.

In addition, EVN will increase water levels in hydropower plant reservoirs, especially Hoa Binh, which will rise to 116m, and will make full use of diesel power plants to create an additional 160 million KWh at the Phu My and Ba Ria plants.

The public utility is also considering buying 770 million KWh in 2006 from China, 16 billion KWh in 2007 and 1.9 billion KWh in 2008.

EVN is considering the introduction of a build-operate-transfer (BOT) model in order to attract private financing for new power projects. It requires VND45tn ($2.8bn) to complete the 14 power projects now under construction.

The 14 projects should help EVN meet the additional 600MW demand over the next two years.

Since 1975, Vietnam has built many major power plants, including the Hoa Binh hydroelectricity power plant and the Phu My thermal power complex, as well as the North-South 500kV transmission line.

Power output has increased from under 3 billion KWh in 1975 to 53 billion KWh currently. The target for 2010 is 100 billion KWh.

Investment in the power sector has rapidly increased. EVN alone has invested more than $14 billion in the past decade. All districts and 91.25 per cent of households in the country now has access to the national electricity grid.