The rapid economic upheaval over the past year has officially ended the heyday of investors who have sunk money into building hydropower plants in localities across the country, a top banker said.

>> Hydropower projects left behind as investors flee Phan Dinh Chien, director of the Quang Nam branch of the Vietnam Development Bank, is knowledgeable on the issue as he has evaluated and assessed many loan applications of hydropower investors. A number of unfinished hydropower projects have had to die young as the investors can no longer afford the exorbitant lending interest rates, he said. “There are yet many other causes: the trading of electricity, building relationships with the localities, and especially the market competitiveness, as no matter how many plants there are, there is only one buyer – the Electricity Group of Vietnam (EVN),” he explained. A recent report by the Ministry of Agriculture and Rural Development shows that 160 hydropower projects in 29 provinces and cities have occupied nearly 20,000 hectares of forests for their facilities.Poor revenues In the central province of Quang Tri, the busiest days of the hydropower building race were between 2007 and 2008, when the economy posted positive signs and power demand was high, according to Hoang Tien Dung, head of the power management bureau under the province’s Department of Industry and Trade. “But now there is no need for the authorities to demand the removal of the projects from development plans, as none of them are financially able to resume investment,” he commented. The province’s hydropower plants are now facing difficulties in selling the electricity they produce, even at a low rate of VND530 per kWh, he said. Even with a selling price double that rate, the Dakrong 3 hydropower plant can only gain enough revenue to clear bank interests. “We had to borrow loans to cover 50 percent of the total investment, and the VND1.2 billion monthly revenue from generating power is only enough to repay the bank,” said chairman Mai Van Hue. The plant was expected to recoup investment after 10 years of operation, but Hue said the timeline should be extended to 20 or even 25 years under the current situation. “I’d have never invested in hydropower had I known things would be this bad,” he lamented. “No private investors are able to enjoy profits from hydropower now.”