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|EVN is looking at tight capital flows for its approved projects|
In the signing ceremony on lending VND5.4 trillion ($237.6 million) to the expansion project on Vinh Tan 4 thermal plant, EVN general director Dang Hoang An said that in accordance with the general development strategy for the power industry, Vinh Tan 4 thermal plant must raise its capacity to 43,000MW by 2020 and to 60,000 MW by 2030 to adapt the annual average power consumption of 5,000 kWh per person.
To increase capacity, EVN needs to raise $40 billion by 2020 and $148 billion by 2030.
An added that every year EVN needs an additional capital of VND135 trillion ($5.9 billion). Within the next four years, EVN requires substantial capital to ensure the smooth operation of its projects.
When talking about investment capital for EVN, Nguyen Quoc Hung, a senior official of the State Bank of Vietnam (SBV)’s Credit Department, said this is an urgent problem. For example, the expansion plan on Vinh Tan 4 thermal plant needs a capital of VND24 trillion ($1.1 billion), and besides the owner’s equity, EVN expects to borrow over VND16 trillion ($704 million), sourced half-and-half from foreign and domestic loans.
Regarding domestic loans, Vietinbank, ABBank, TPBank, HDBank, and Agribank expressed willingness to lend to EVN. However, except for Agribank, all four remaining banks have reached their lending limit to EVN. Now EVN and these banks are proposing the government to loosen the limit.
In accordance with current regulations, it is difficult for EVN to mobilise capital from commercial banks. Without loosening the limit, SBV, the Ministry of Industry and Trade, and EVN will have to request the prime minister’s approval for every contract or project on an individual basis.
Regarding the expansion plan on Vinh Tan 4 thermal plant, An said that EVN is dealing with international credit institutions such as the World Bank and the ADB for foreign loans, but this step is forecasted to take a very long time.
Talking about a solution for EVN, Nguyen Quoc Hung said that on one hand, SBV is considering to adjust related regulations. On the other hand, EVN should proactively look for new sources of funding to diversify its investment capital.