'Difficult math' EVN must 'solve' when adjusting thermal power investment of more than 50 trillion

09/20/2024 14:25

Raising capital for this power project is expected to take a long time.

(PLVN) - "Converting Quang Trach II Thermal Power Plant from coal to LNG to limit emissions of toxic substances into the environment is necessary, in line with Vietnam's international commitments. However, this is a project that requires mobilizing a huge amount of investment capital in the context that EVN is facing financial difficulties," EVN Deputy General Director Nguyen Tai Anh told PLVN.

In early September 2024, the People's Committee of Quang Binh province issued a Decision approving the adjustment of the investment policy of the Quang Trach II LNG Thermal Power Project, located in Hon La Economic Zone, Quang Binh.

Previously - on February 18, 2021, the Quang Trach II Thermal Power Project was approved by the Prime Minister in Decision No. 215/QD-TTg, with EVN as the investor, with a capacity of 1,200 MW, using coal fuel, with a total investment of VND 48,156 billion.

But then, based on the proposal of Quang Binh province and EVN, the Ministry of Industry and Trade submitted to the Prime Minister permission to adjust the Quang Trach II Thermal Power Project to switch to using LNG gas fuel, with a capacity of 1,500 MW.

The conversion of the Quang Trach II Thermal Power Project from coal to gas to limit the emission of toxic substances into the environment is extremely necessary, contributing to the implementation of the policy of developing clean, environmentally friendly energy sources. With this policy, the plant's capacity has been adjusted from 1,200 MW to 1,500 MW, the total investment has also been increased to VND 52,490 billion, of which equity capital accounts for 20%, and borrowed capital accounts for 80% of the total investment.

According to Deputy General Director Nguyen Tai Anh, EVN's functional units are actively developing a Feasibility Study (FS) Report to submit to competent authorities for approval in early 2025, and are expected to start construction in early 2026.

“EVN is a unit with a lot of experience in project investment as well as managing the operation of power projects using combined cycle gas turbine technology like the Quang Trach II Thermal Power Project. However, this is a project that requires a huge amount of capital, in addition to importing LNG for operation, so it must be calculated appropriately, effectively and especially there must be time to arrange these tasks,” said Mr. Nguyen Tai Anh.

EVN Deputy General Director Nguyen Tai Anh: "It is expected that the project's FS will be approved in early 2025."

EVN representative said that when the world is switching to green and clean energy, borrowing capital to deploy coal-fired thermal power is not easy, so it is necessary to focus on mobilizing resources to deploy gas-fired thermal power.

However, as mentioned above, the Quang Trach II Thermal Power Project uses mostly commercial loans, which is a difficulty in the context of EVN's two consecutive years of large losses. Specifically, EVN's accumulated loss in 2022 - 2023 is more than 47,000 billion VND.

In addition, regulations on credit limits for enterprises in their relations with commercial banks are also an obstacle, because most domestic commercial banks have exceeded the credit limit for EVN/EVN and related parties.

It is known that to meet the electricity demand in the period of 2025 - 2030, EVN must continue to promote investment in the construction of power source and grid projects, with a total annual investment value of up to hundreds of thousands of billion VND.

Meanwhile, in mid-August, EVN received a "nod" from the Vietnam Development Bank (VDB) on a state investment credit of about VND50,000 billion for important, priority projects in the next 5 years.

Source: https://baophapluat.vn/toan-kho-evn-phai-giai-khi-dieu-chinh-dau-tu-nhet-dien-hon-50-ngan-ty-post526058.html