Vietnam state utility EVN explains why it holds $5.8 bln in cash, bank deposits

Vietnam Electricity (EVN) has defended its decision to maintain VND152.4 trillion ($5.78 billion) in cash and bank deposits, saying its large cash balance is needed to secure fuel supplies for power generation, meet debt obligations, and prepare funding for major power projects planned over the coming years.

According to the utility's 2025 consolidated financial statements, total assets reached VND783.09 trillion ($29.72 billion) at the end of 2025, up more than VND107 trillion ($4.06 billion) from the beginning of the year. Cash, cash equivalents and bank deposits rose 67.2% to VND152.4 trillion ($5.78 billion), accounting for 19.5% of total assets.

EVN said the figure represents the combined cash balances of all subsidiaries and affiliated units across power generation, transmission, distribution and supporting services.

The utility noted that despite the sizeable cash position, the amount remains below its short-term liabilities of more than VND227 trillion ($8.62 billion) as of December 31, 2025.

Those obligations include over VND118 trillion ($4.48 billion) in payments to fuel suppliers and independent power producers, as well as more than VND47 trillion in debt repayments due within one year.

The figures highlight the group's substantial funding requirements for both operations and investment activities, EVN said, adding that maintaining a significant cash buffer is necessary to ensure financial stability and support key investment projects.

First, power generation subsidiaries need large cash reserves to open letters of credit for domestic and imported fuel purchases. EVN group's parent company must also maintain sufficient liquidity to make regular payments to electricity suppliers outside the group.

With fuel prices remaining volatile and prone to sharp increases, maintaining adequate liquidity is essential to ensure uninterrupted electricity supply, the utility said.

Second, EVN and its subsidiaries continue to carry significant debt. Short-term borrowings alone totaled nearly VND47.6 trillion ($1.81 billion) at the end of 2025, requiring the group to preserve strong liquidity to meet repayment obligations and maintain its creditworthiness.

Third, capital requirements for future power generation and transmission projects remain substantial. Several urgent and strategically important projects carry investment costs running into billions of dollars, requiring EVN to prepare sufficient equity contributions and contingency funding in case credit disbursements are delayed.

Massive investment pressure ahead

EVN continued to increase borrowings in 2025 to finance investment activities, with total outstanding debt reaching VND341.3 trillion ($12.96 billion) at year-end, up 5.3% from the start of the year. The total included nearly VND47.6 trillion in short-term loans and VND293.72 trillion in long-term debt.

Between 2021 and 2025, EVN disbursed around VND500 trillion ($18.98 billion) for development investment. Annual disbursements reached over VND112.89 trillion in 2024 and VND125.78 trillion in 2025.

EVN chairman Dang Hoang An said investment pressure would remain intense in the coming years but could not be delayed.

"If we do not invest now, we could face power shortages within five years, as a typical power generation project takes about five years to develop," An said.

He added that EVN currently accounts for around 70% of the total investment spending of the 18 state-owned groups and corporations under by the Ministry of Finance.

Under EVN's 2025-2030 development strategy, the utility plans to invest about $5 billion annually, equivalent to roughly $25 billion over the next five years.

The investment program includes a series of large-scale power generation and transmission projects, including the Ninh Thuan 1 nuclear power plant and offshore wind power developments.

EVN also faces the challenge of accelerating its energy transition agenda through investments in cleaner energy sources, modernization of existing power plants, and increased spending on research and technological innovation.

Under Vietnam's revised National Power Development Plan VIII, the country's installed power generation capacity is expected to reach around 183 gigawatts by 2030, compared with approximately 87.6 GW currently.

EVN is expected to develop about 13 GW of new capacity, while nearly 83 GW will be built by other investors.