$2.58 bln FDI power project fuels central Vietnam province industry

The $2.58 billion BOT Van Phong 1 thermal power plant, invested by Japan’s Sumitomo Group, was a major driving force of the 18.5% year-on-year hike in industrial value of Vietnam’s central province of Khanh Hoa in 2024.

This is the largest FDI project in Khanh Hoa to date, with two turbines for a total installed capacity of 1,432 MW, according to the provincial People's Committee.

The build-operate-transfer (BOT) project started construction in 2019 and officially began commercial operation in January 2024. It is scheduled to be transferred to the Vietnamese government after 25 years of operation.

The power plant is set to contribute 8.5 billion kWh yearly to Vietnam’s national grid, equivalent to 3% of the country’s power generation. The generated energy will mainly serve the southern region and part of the northern region once the 500 kV Van Phong-Binh Dinh transmission line is completed in 2027.

Last year, the province attracted 26 non-state investment projects with total registered capital of over VND50.65 trillion ($2 billion). Additionally, 17 projects received capital increases totaling about VND3.09 trillion ($121.74 million). The province also scrapped five others worth over VND5.35 trillion ($210.78 million).

Investors have accelerated progress on several large-scale projects, including the Cam Ranh Bay urban area, the KN Paradise resort and entertainment complex, the Vinhomes Happy Home social housing project, and the administrative urban area in Dien Khanh district.

The Cam Lam-Vinh Hao Expressway was put into operation in April 2024, while the Van Phong-Nha Trang Expressway and the Subproject 1 of Khanh Hoa-Buon Ma Thuot Expressway (Phase 1) are expected to be completed by April 30, 2025 and by 2026, respectively.

The province has started constructing several other key projects, including a road connecting Khanh Hoa with Lam Dong and Ninh Thuan provinces and a coastal road from Van Ninh district to Ninh Hoa township.

In 2025, Khanh Hoa targets a gross regional domestic product (GRDP) growth rate of around 9.5-10%, with hopes of reaching 10-10.5%. Its export turnover is projected to reach $2.15 billion, up 7.5% compared to 2024.

Total development investment capital is set at VND95.07 trillion ($3.75 billion), a year-on-year increase of 18%; and state budget revenue at VND24.1 trillion ($949.5 million), up 20%.

The province's important plans were recently approved by relevant authorities. These include the provincial master plan for the 2021-2030 period, with a vision to 2050; the adjusted master plan for the Van Phong Economic Zone until 2040, with a vision to 2050; the Cam Lam New Urban Area master plan until 2045; and the adjusted master plans for Nha Trang and Cam Ranh towns until 2040 and 2045, respectively.

According to Khanh Hoa authorities, the province will continue to focus on completing strategic infrastructure projects, particularly in transportation, seaports, and logistics. In addition to the Cam Ranh International Airport, the province's seaport system is being gradually upgraded to facilitate the growth of logistics services, maritime transport, and other industries.

The completed Cam Lam-Vinh Hao and Nha Trang-Cam Lam expressways, along with several other ongoing regional expressway projects, are expected to significantly strengthen connectivity between Khanh Hoa and surrounding areas, opening up new opportunities for development across the province.

The government’s special mechanisms and policies provide a strong foundation for Khanh Hoa to attract major investment projects, which will drive economic growth in the near future.