State may still own 100% of Vietnam Electricity

State utility Vietnam Electricity (EVN) will continue to be a one-member limited liability company with its entire stake held by the state, according to a restructuring scheme for the group until 2025.

The scheme, just submitted to the Prime Minister by the Commission for the Management of State Capital at Enterprises, aims to develop EVN into a strong economic group with sustainable, effective and profitable business performance.

It also features a plan to re-organize the parent company and rearrange the ownership and divestment ratios in its member units in order to preserve and develop the state equity in EVN and the EVN investment in other businesses.

According to EVN, in 2021, the group preserved and developed state capital with a total consolidated asset value of VND731,000 billion ($30.72 billion), of which equity was VND255,000 billion ($10.72 billion), an increase of over 6% from the previous year.

Under the scheme, 15 units under EVN will have their organization and operating structure kept unchanged. They include seven hydropower companies namely Son La, Hoa Binh, Ialy, Tri An, Tuyen Quang, Se San, and Huoi Quang-Ban Chat; the power project management units 1, 2, 3; EVN Construction and Technology Investment Management Board; Electricity Power Trading Company (EPTC); EVN Information and Communications Technology Company (EVNICT); EVN Power Service Center (EVNPSC); and EVN Electric Information Center.

EVN will hold 100% of charter capital at the National Power Transmission Corporation (EVNNPT); and five power distribution corporations namely Northern Power Corporation, Central Power Corporation, Southern Power Corporation, Hanoi Power Corporation, Ho Chi Minh City Power Corporation (EVNHCMC); and Thu Duc Thermal Power Company Limited.

The National Load Dispatch Center (A0) will be separated from EVN and see its operation terminated. EVN will then establish a national electricity market and electricity system operating one-member limited liability company.

In the next five years, EVN will equitize the Power Generation Corporation 1 (EVNGENCO1) and reduce its ownership ratio in the Power Generation Corporations 2 and 3, to hold at least 51% of the charter capital of these companies.

The Power Engineering Consulting Joint Stock Companies 1, 2 and 3 will have over 50% of their stake held by EVN.

The utility will continue to divest capital and keep less than 50% of charter capital in the Power Engineering Consulting Joint Stock Company 3; Dong Anh Electrical Equipment JSC; and Vinh Tan 3 Energy JSC.

In addition to the arrangement and restructuring of affiliated units, the scheme also puts forth plans to restructure corporate governance; improve the efficiency of financial, asset and capital management, ensuring cash flow balance; and better labor management. At the same time, EVN will promote the application of technology and digital transformation in order to become a company operating in digital mode.

EVN's loss in 2022 amounted to VND28,876 billion ($1.22 billion), according to a report it sent to the Ministry of Industry and Trade in January.

The corporation believes that in 2023, if the electricity price remains the same, it would lose an additional VND64,941 billion ($2.75 billion), resulting in an accumulated loss of VND93,000 billion ($3.94 billion) in 2022-2023.