Philippines's AboitizPower to acquire 25% stake in central Vietnam power plant for $220 mln

AboitizPower, an energy arm of the Philippines’s conglomerate Aboitiz Equity Ventures (AEV) has announced a decision to acquire a 25% stake in the operator of a coal-fired power plant in central Vietnam for $220 million.

The equity stake in Van Phong Power Company Limited (VPCL) would be purchased from Japan’s Sumitomo, marking its first major step beyond the Philippines, the firm said in a press release last week.

VPCL is a wholly owned subsidiary of Sumitomo.

“This investment is in parallel with our renewable investment program and is aligned with our aspiration to ensure a balanced long-term energy transition, contributing to reliable and affordable energy systems,” the company said.

The completion of the transaction is contingent upon customary closing conditions, including obtaining the necessary regulatory approvals.

VPCL broke ground on the 1,320-MW Van Phong 1 coal-fired power plant in 2019 and began commercial operations in 2024.

The $2.86 billion project, located in Khanh Hoa province, was developed on a build-operate-transfer (BOT) basis and 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.

In a statement made on May 1, Sumitomo said it will transfer 50% of the Japanese giant’s equity interest in VPCL, starting in the fiscal year of 2026 or later.

Following the transfer, Van Phong Power Company Limited (VPCL), established by Sumitomo in 2018, will be reclassified from a consolidated subsidiary to an equity-method affiliate.

In the fiscal year of 2024, VPCL posted pre-tax profit of $111.5 million, up from $70.68 million from previous year.

In addition to the Van Phong 1 project, Sumitomo has also invested in the Phu My 2.2 thermal power plant in the southern metropolis of Ho Chi Minh City.

With a total investment of $400 million, the project was backed by three global energy giants, France’s EDF and Japan’s Sumitomo, and JERA.