Vietnam Electricity seeks to extend coal payment deadlines
Wednesday, May 17, 2023, 12:29 GMT+7
State utility Vietnam Electricity Group (EVN) has written to its coal suppliers asking them for an extension of payment deadlines to maintain power generation.
State utility EVN is facing financial distress while struggling to ensure an adequate material source to fuel electricity production amid the risk of a power crunch.
The group sent dispatches to Vietnam National Coal and Mineral Industries Group (TKV) and Dong Bac Corporation proposing they extend the deadlines on payments for coal to help the former overcome the hardship and guarantee a sufficient supply of power.
The proposal followed the government’s directive that urges EVN to take action to improve its health by negotiating with investors, suppliers, and power sellers.
EVN’s poor cash flow
EVN and its members have faced multiple challenges caused by soaring material prices and losses on power generation since 2022, said the electricity group.
Given its poor cash flow, the state utility could not make payments for material suppliers and power sellers.
Apart from proposing TKV and Dong Bac Corporation extend payment deadlines, EVN expects the suppliers to continue providing its thermal power plants with sufficient coal to maintain electricity generation.
In addition, EVN proposed the Vietnam Oil and Gas Company and the Song Hau 1 Power Project Management Board lend coal to the Duyen Hai 3 and expanded Duyen Hai 3 thermal power plants.
EVN expects to borrow 52,000 metric tons of coal from the Song Hau 1 Thermal Power Plant.
The group pledged to return the amount of coal to the Song Hai 1 Power Project Management Board in late May.
Extreme weather hitting the country in the first four months of 2023 shrank water sources at reservoirs, hindering power generation, said EVN.
Besides, the shortage of materials such as coal, oil and gas, coupled with prolonged repairs to some generators, dragged power production down.
Therefore, EVN sought support from its suppliers and partners to get out of the turmoil.
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