Samsung clinches thermal power plant BOT agreement

Samsung Group will begin construction on the 1,200 megawatt Vung Ang 3 thermal plant from 2018

The group will begin construction on the 1,200 megawatt Vung Ang 3 thermal power plant under build-operate-transfer (BOT) agreement after a country-wide survey to seek an investment venue.

Under a memorandum of understanding (MoU), Samsung C&T would complete a feasibility study report in early 2015 and start its construction in February 2018. The plant is expected to enter commercial operations by 2020.

The 1,200 megawatt Vung Ang 3 project is a part of the 4,800MW Vung Ang thermal power centre in the central province of Ha Tinh, where PetroVietnam is building the 1,200 megawatt Vung Ang 1 power plant.

According to the nation’s power development master plan, the Vung Ang 3 thermal power plant would comprise two 600-megawatt turbines.

Deputy chairman of Samsung C&T Joon Suk Choi said that “This is our first thermal power plant in Vietnam. With our potential capital and experience of other build-operate-transfer (BOT) projects in other countries, Samsung C&T is committed to quality as well as meeting the timeline of this project.”

According to the Ministry of Industry and Trade (MoIT), BOT agreements with power plant investors in Vietnam will be signed after the investors conclude coal and power purchase deals.

Chairman of the Ha Tinh Provincial People’s Committee Vo Kim Cu also said that the province would ensure infrastructure and other services needed to be developed to support the implementation of the project.

With the nation’s electricity consumption rising at 12 per cent a year, Vietnam’s current power plants are not keeping pace with demand peaks. The dry season is, above all, a major problem due to Vietnam’s dependence on hydro-power plants which make up 40 per cent of the nation’s generation capacity.

Vietnam’s total power generation capacity is expected to increase to about 75,000MW by 2020 with produced and imported electricity reaching 330 billion kWh and 146,800MW by 2030.

Le Tuan Phong, deputy head of MoIT’s General Department of Energy, stressed that while the department had worked on 18 BOT power plants, the BOT Vung Ang 3 was the most important project, therefore it would need supports and efforts from all stakeholders.

“The General Department of Energy is committed to providing support and guidance for the investor,” said Phong.

Experts noted that the negotiation of power prices between power plant investors and the state-run Electricity of Vietnam (EVN), the country’s sole electricity buyer, might be a headache that would possibly lengthen construction deadline.

Although the Vietnamese government has been calling for foreign investment into the power sector, there are currently just five licensed foreign-invested BOT power plants.