More than VND 132,000 billion needed
For the period 2016-2020, EVN has set goals to ensure the required schedules of the vital and urgent power projects, with a total capital to be mobilized of over VND 600,000 billion. In 2016, the total value of investment of EVN is expected to be VND132,536 billion, increasing by 2.4% compared with the year 2015.
Accordingly, with respect to generation projects, EVN plans to put into operation 9 units (total capacity of 2,534 MW), including Lai Chau Hydro power project, units 2 and 3 (2x400 MW), Huoi Quang Hydropower project, unit 2 (260 MW), Trung Son hydropower project, units 1 and 2 (2x65 MW), Song Bung 2 hydropower project (2x50 MW), Duyen Hai 3 thermal power project (2x622 MW). At the same time, EVN will start the construction of Vinh Tan 4 Expansion project and ensure the schedule of the projects to be energized in 2017 including Thai Binh thermal power project (unit 1), Vinh Tan 4 thermal power project (unit 1), Thac Mo hydropower expansion project and urgent projects at the Power Complexes of Vinh Tan and Duyen Hai.
For the grid project, in 2016, EVN has set the goal to complete and put into operation 351 projects of 110-500 kV. At the same time, EVN will commence 337 projects, of which urgently finalizing investment procedures, arranging funds for critical projects such as 500 kV My Tho - Duc Hoa, Western Hanoi - Thuong Tin transmission lines, upgrading capacity for 500 kV Tan Dinh and Cau Bong substations. Implementation shall be focused on the grid projects, especially the project to upgrade the capacity of North-South transmission system, and the synchronized networks of Vinh Tan, Song Hau, Long Phu power complexes.
For 2016-2020, EVN needs huge capital resources to invest in rural energy projects
For rural and island power projects, EVN and its subsidiaries has set the target of ensuring the completion of the projects to supply power to Cham Island (Quang Nam), island communes of Lai Son, Hon Nghe (Kien Giang); finalizing investment procedures for commencement of the power projects under the Program for supplying power to rural, mountainous and island areas for the period 2013-2020 (Decision 2119/QD-TTg).
EVN's goal is to ensure power supply for the process of modernization and industrialization as well as serving people's lives, at the same time continue to invest in power system infrastructure. By the year 2020, EVN shall ensure that most rural households can get access to electricity. To realize this goal, every year EVN needs about USD 6 billion for investment, not mentioning the capital invested by other enterprises in the power infrastructure. Meanwhile, other factors of adjustment of USD/VND exchange rate in 2015, increase in the selling price of coal for power production from 2016, increase in the gas price, water resources tax and forest environmental costs have not been taken into account in the current power tariff. The factors have created high pressure on the financial situation of EVN.
Speaking at the meeting with international partners in the end of January 2016, Mr. Dang Hoang An, EVN President and CEO confirmed that EVN expected to continuously receive support and help from diplomatic, financial and international organizations in timely financing enough funds, ensuring the required schedule and the quality of power projects.
Every year, EVN needs some USD 6 billion for investment in power supply serving modernization and industrialization cause of the country
Multilateral support needed
To solve the problem of capital for power projects in 2016, firstly, EVN will give priority to financing funds for key projects to be completed in 2016. At the same time, all the PMU’s are required to pay attention to financial planning, accepting completed volume of work timely to pay contractors and disburse local and foreign loans in a prompt manner.
EVN also suggested the Government approve the Revised Master Plan VII and approve specific mechanisms for implementation of power projects, apply ODA loans as a source of budget provided to the project owners to ensure funding for rural energy projects during the period 2016-2020; and allow the power projects to borrow from Ministry of Finance with ODA and concessional loans following the terms and condition of donors, re-lending organizations shall not bear credit risks, making it increased in borrowing costs for the projects.
Mrs. Victoria Kwakwa - Country Director of the World Bank (WB) in Vietnam, East Asia and the Pacific, also said: Over the past 20 years, the international multilateral and bilateral organizations in Vietnam have supported more than USD 10 billion to serve the modernization and industrialization cause of Vietnam. The support was mainly focused for the Rural Energy Program, strengthening the transmission and distribution systems as well as upgrading power infrastructure. The fact was proven, the power sector in general and EVN in particular has played a key role in promoting socio-economic development and improving the people’s standard of living.
"The WB in Vietnam together the partners will co-operate closely with the EVN, Vietnam power sector, in the coming period, to continue to enhance the quality of power supply, contribute to promoting socio-economic development as well as poverty reduction in Vietnam", asserted Ms. Victoria Kwawa.
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Mr. Christian Haas – Director of the German Bank for Reconstruction (KfW) in Hanoi Office said: the kfW has funded energy projects in many different countries. However, only a few partners have the capacity to prepare and implement the projects in a quick, efficient and professional manner. Proudly speaking, EVN is one of our partners using our funds most efficiently not only in Vietnam but also globally. Currently, the total amount of funding by KfW for EVN is over 400 million euros.
Within the next 2 years, KfW expects to continue to sign with EVN about 500 million Euros, focusing on projects improving the distribution and transmission systems in the small and medium cities and major cities as Hanoi and Ho Chi Minh.
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