The Ministry of Industry and Trade has proposed that the government includes five coal-fired thermal power projects in the national power development plan VIII.
In its latest proposal to the government on the PDP VIII for the 2021-2030 period with vision until 2050, the ministry said the five projects, which have already received in-principle agreement from Vietnamese authorities, should be included to help the government avoid legal disputes with the investors as also paying compensation.
It noted that none of the investors showed willingness to have their projects scrapped despite capital arrangement difficulties.
These projects with a total capacity of 6,800 MW remain at the stage of investment preparation. They include four build-operate-transfer (BOT) projects to be invested in by foreign enterprises - Song Hau 2, Vinh Tan 3, Nam Dinh 1 and Quang Tri. One - Cong Thanh - would be invested in by a domestic enterprise.
The five projects are facing common difficulties relating to capital arrangement and investor changes, according to the ministry.
Investors of these projects have spent a lot of time, human resources, and money to push them forward after receiving in-principle agreement from authorities.
For instance, in March 2013, the government approved Malaysia's Toyo In Group Berhad as investor for the 2,000MW Song Hau 2 project in the Mekong Delta province of Hau Giang.
The BOT, electricity purchase and land lease contracts were signed in December 2020. The investor has paid over VND343.2 billion ($14.46 million) to the provincial People's Committee for site clearance compensation and resettlement support.
However, it has not yet arranged the remaining capital to implement the project and has proposed extending the deadline for financial closure to June 2023.
For the 1,800MW Vinh Tan 3 project in the south-central province of Binh Thuan, one shareholder - Pacific Group JSC, which held a 22% stake, has withdrawn from the project. So the project is seeking to change its shareholder structure and arrange capital.
Similarly, the 1,200 MW Nam Dinh 1 project in the northern province of Nam Dinh was approved by authorities in principle in April 2017. It is currently looking for a new investor after a foreign investor withdrew capital.
The 1,200 MW Quang Tri project in the eponymous central province seems to face the biggest difficulty. The Vietnamese government in August 2013 allowed EGATi, a wholly owned subsidiary of the Electricity Generating Authority of Thailand (EGAT), to be the investor. However, with this project also facing difficulties in arranging capital, negotiations with Vietnamese authorities for related contracts have been halted.
The 600MW Cong Thanh project in the north-central province of Thanh Hoa is also struggling to mobilize capital. The investor - the Cong Thanh Thermal Power Joint Stock Company - and the provincial People's Committee have asked for permission to convert the plant to one using LNG and increase its capacity to 1,500 MW. The MoIT has said the conversion will be considered during the implementation of PDP VIII.
Despite numerous difficulties, representatives of these projects are not willing to give up and say they are trying to raise enough capital to implement them.