Vietnam needs $700m by year-end to fund power projects

9 July 2008 – According to the Electricity of Vietnam Group (EVN), it requires around 11.9trn VND ($704m) between now and the end of the year to develop power generating and transmission line projects.

Of the required capital, some 6.8trn VND is expected to be sourced from domestic commercial credits, 1.1trn VND from foreign loans and the remaining 4trn VND from bonds.

In the first half of this year, 14 hydroelectric and thermoelectric power projects under construction were halted because of capital shortages, says the report published by the Asia Pulse news agency.

It also reported that EVN failed to arrange investment capital for five other power projects, including Huoi Quang, Ban Chat, expanded Uong Bi 2, Quang Ninh 2 and Vinh Tan 2, as well as the construction of 220-500 kV electricity transmission lines.

To reduce capital shortages, EVN put on hold around 390 projects with a combined investment of 1.5trn VND. It also sought basic depreciation loans from local joint sock companies such as Pha Lai and Vinh Son-Song Hinh, and short-term funding from foreign banks.

Looking longer term, EVN is planning to sell part of its stakes in joint stock companies through direct negotiations with strategic investors, and has a master plan to set up joint stock companies in which it holds less than 30 per cent of stakes to carry out the approved projects.

EVN in the past six months increased its total output to 36.4bn kWh, a 14.8 per cent year-on-year rise, and sold about 31.8bn kWh, up 15.6 per cent over the same period last year.