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Work starts on $1.75bn Chinese-owned thermal power plant in Vietnam

Work starts on $1.75bn Chinese-owned thermal power plant in Vietnam

Sunday, July 19, 2015, 16:45 GMT+7

A consortium of Vietnamese and Chinese enterprises on Saturday began the construction of a mega thermal power plant financed mostly by Chinese banks in the south-central province of Binh Thuan.

The US$1.75 billion Vinh Tan 1 thermal power project, 95 percent owned by two Chinese firms, Southern Power Grid Co. Ltd. and Chinese International Power Co., is located in Vinh Tan Commune in Tuy Phong District.

The remaining five percent belongs to Vinacomin - Power Holding Corporation, a subsidiary of state-run Vietnam National Coal and Mineral Industries Group.

However, the consortium will provide 20 percent of the total capital needed for the implementation of the project while the remaining 80 percent, around $1.4 billion, will be arranged by five Chinese banks.

It is expected that after about four years of construction, the consortium of Vietnamese and Chinese investors will operate the plant for 25 years, before transferring it unconditionally to Vietnam under the build-operate-transfer mechanism.

The Vinh Tan 1 project with a capacity of 1,200MW is introduced as the first power project in Vietnam to apply pulverized coal-fired boiler technology, using anthracite coal of the country.

As planned, the first phase of the project, a 600MW generator, will come on stream in late 2018, and the second unit will join the grid six months later.

According to a press release provided by the project developers, the plant is the largest to be built and run by Chinese enterprises in Vietnam.

Besides the main Chinese investors, the engineering-procurement-construction (EPC) contractors are a research institute in Guangdong and the Guangdong thermal power construction company.

In addition, major pieces of equipment like boilers, turbines and generators will be supplied by Dongfang Electric Corporation.

Zhao Jianguo, president of Southern Power Grid Co. Ltd., said the project developers are committed to using advanced technology and local laborers.

Dang Huy Cuong, general director of the energy department under the Vietnamese Ministry of Industry and Trade, confirmed that the Vinh Tan 1 facility has an important role in power supply, especially for the southern region.

Vinh Tan 1 is located in the same district as that of the Vinh Tan 2 plant, which has caused serious environmental pollution since it became operational last year.

In mid-April this year, local residents erected barricades to block a section of National Highway 1A in protest at the Vinh Tan 2 thermal power plant causing air pollution, driving trucks to queue up dozens of kilometers long on two ways in the area.

They agreed to remove them one day later when local authorities pledged to force the Vinh Tan 2 plant to stop worsening pollution and clean the atmosphere within ten days.

Deputy Prime Minister Hoang Trung Hai then ordered state-owned power firm Electricity of Vietnam (EVN), which supervises the power plant, to stop discharging dust into residential areas.

The $1.05 billion Vinh Tan 2 project, whose construction kicked off in August 2010, was developed by EVN based on an EPC contract signed with the Chinese contractor Shanghai Electric Group.

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