Van Phong Power Company, a wholly-owned subsidiary of Japanese keiretsu Sumitomo, inaugurated the 1,432 MW Van Phong 1 coal-fired power plant in Vietnam’s central province of Khanh Hoa on Wednesday.
The $2.58 billion project, developed on a build-operate-transfer (BOT) basis, started construction in 2019 and officially began commercial operation in January 2024. The power plant is scheduled to be transferred to the Vietnamese government after 25 years of operation.
It 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.
Wholly-invested by Sumitomo, the power factory is the largest-ever foreign direct investment (FDI) project in Khanh Hoa province. The project is expected to attract investments into Van Phong Economic Zone and contribute VND1 trillion ($40.49 million) to the local budget annually. The project also contributed VND4 trillion to the budget during construction.
Speaking at the inaugural event, Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc said the power plant will help fortify Vietnam’s energy security, in line with the upgrade of the Vietnam-Japan partnership to a comprehensive strategic level.