Japanese official development assistance (ODA) loans play a vital role in ensuring Vietnam’s power projects continue moving forward and power supply keeps up with demand.
Japan has been a consistent supporter of Vietnam’s power supply projects in the areas of supply, transmission, and distribution.
The state –run Electricity of Vietnam (EVN) currently has conducted 12 power projects in progress funded by over $5 billion in ODA loans from Japan, of which seven are completed. The remainder are in active progress.
Since 1995, the total Japanese ODA toward power projects totaled $11 billion, of which $5.34 billion came from the Japan International Cooperation Agency. The Asian Development Bank has distributed capital totaling $2.37 billion, said an EVN report.
EVN reported that during 2011-2012, ODA loans totaled around $4 billion with EVN receiving $3.5 billion. This has been particularly handy in 2012, as the company found it difficult to source capital from banks.
Power projects funded by the Japanese government made up nearly 18 per cent of EVN’s power supply and 10 per cent of the national power system.
Notably, in 2011 Vietnam and Japan signed a cooperation agreement on the Ninh Thuan 2 nuclear power plant. Accordingly, Japan will support Vietnam in preparing for and implementing a nuclear energy programme, as well as training human resources for the plant and developing nuclear power regulations.
The Ninh Thuan 2 nuclear power plant would have a capacity of 2,000 MW with two turbines and will be built in the province of the same name. It would be Vietnam’s first nuclear power plant and follows Vietnam’s power development strategy and was approved by the 12th National Assembly. The $12 billion project is slated to start in 2014, with the first phase to begin commercial operations by 2020.
EVN said that it was aiming to get Japanese ODA support of around $1.5 billion between 2013-2015 for developing the Duyen Hai 3 power plant, transmission projects, human resources, and infrastructure necessary for nuclear power.
EVN asserted that as a leader in high-tech innovation, Japanese investment would be bolstered by technology exchange.
Under Vietnam’s Power Development Plan towards 2020, it is envisioned that the total power capacity of Vietnam will be increased to 75,000 MW by 2020 and 146,800 MW by 2030.
With electricity consumption rising by 12 per cent a year, current projects would not keep up with demand. The dry season is particularly difficult, with Vietnam relying heavily on hydro-power, which makes up 40 per cent of the country’s total production.
From now to 2015, EVN needs at least $25.3 billion to for its power generation and transmission projects.