O Mon 3 gas-fired power project delayed over ODA procedure entanglement

The O Mon 3 gas-fired power plant project in southern Vietnam might not be able to receive the first gas flow from Block B in the fourth quarter of 2026 as scheduled, due to problems related to official development assistance (ODA) procedures.

The VND25,240 billion ($1.07 billion) project, as part of the mega Block B gas project in the southern city of Can Tho, has received VND9,926 billion ($419.26 million), or 40% of the investment, in reciprocal capital from state utility Vietnam Electricity (EVN). The other 60% is set to be sourced from Japanese ODA.

However, EVN has informed that no domestic commercial banks meet the conditions to be an on-lending agency for the ODA loans, which must also bear credit risks per the Ministry of Finance's request.

EVN has asked the Prime Minister and the Ministry of Industry of Trade to add the O Mon 3 project to the list of the national prioritized investment projects so its on-lending agency does not have to bear credit risks under the Law on Public Investment.

Block B, 300 kilometers away from Vietnam’s southernmost province of Ca Mau, is expected to supply 5.06 billion cubic meters of gas annually for the 3,810-MW O Mon power complex, featuring the O Mon 1, 2, 3, 4 power plants, which will generate 21.2 billion kWh. The state-owned Petrovietnam has pledged to deliver the first gas flow from Block B in Q4/2026.

The 660-MW O Mon 1 power plant entered operation in 2015, while the three others have yet to begin construction. O Mon 2 is processing procedures to kick off construction; O Mon 3 is waiting for ODA loans to launch; O Mon 4 is selecting a contractor for construction; and EVN is filing for in-principle approval for O Mon 5.

EVN is conducting a feasibility study for the O Mon 3 project and plans to kick off construction in Q3/2025, then launch commercial operations in Q3 or Q4 of 2028, EVN told Can Tho authorities last month.