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Electricity shortage may recur in 2009   2008-09-13 - VNN

It is expected that many power plants will become operational in 2009 but an electricity shortage will still exist.


According to the Electricity of Vietnam (EVN), 10 power plants will become operational from now to the end of 2009, including Buon Kuop, A Vuong, Pleikrong, Ba Ha River, electricity generator unit No 3 under Tuyen Quang Hydropower plant, Nhon Trach 1 Thermopower plant, Ca Mau 2 and Son Dong. The power plants, which have the total capacity of 3,000MW, will help raise the total capacity of the power generating system to 15,000 MW.


In theory, such a capacity would satisfy demand; however, the risk of electricity shortage will still exist.


According to EVN, Vietnam plans to have 86bil kwh of electricity sourced from domestic power plants and imports, including 77bil kwh of merchandise electricity.


It is expected that some 41bil kwh will be consumed in the dry season of 2009, from January to May 2009, which leads EVN to believe that Vietnam will lack some 200mil kwh only. However, an electricity shortage may still occur if power plants cannot be put into operation on schedule.


The electricity demand in the north always increases in the dry season, and the said power plants in the north will not become operational until the end of 2009. In principle, the electricity can be transferred from the south to the north; however, the transfer will still depend on the power grid’s capacity.


Meanwhile, the money for executing the power plant projects has not been arranged yet. EVN has budgeted VND9,300bil of the sum of VND43,130bil it needs. The group plans to borrow money and issue shares, which it estimates will bring in VND35,964bil, meaning that it will still lack VND8,166bil.


EVN has been negotiating with commercial banks on the interest rates applied for power plant projects, accepting the higher interest rate of 21% instead of 11% as previously applied. However, it remains very difficult to get capital for power plants, even at the higher interest rate.


To date, only the Bank for Investment and Development of Vietnam (BIDV) can meet 100% of the demand for capital in the 2008 plan, other banks can meet 70% of the demand only. Banks refuse to give loans because they fear that EVN cannot pay debts in the context of high inflation and low electricity prices.


Lacking capital is the main reason EVN has been citing to explain the tardiness in putting power plants into operation.


EVN has also officially rejected investment in 13 power plants which have the designed capacity of 13,800 MW, suggesting that the government assign the projects to other investors, both domestic and foreign.


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