Japan’s Sumitomo Corporation has gained an investment certificate to develop Van Phong 1 thermal power project worth US$2.58 billion in the central coast province of Khanh Hoa.

Minister of Industry and Trade Tran Tuan Anh (L) presents a letter approving Van Phong 1 thermal power project to Kuniharu Nakamura, chairman of Sumitomo Corporation, in this file photo dated May, 2017 

Before receiving the investment certificate, Sumitomo signed an investment agreement with the Ministry of Industry and Trade in May 2017. Work will start next year on the 1,320 MW station.

Covering more than 350 hectares in Nam Van Phong, Ninh Hoa Town, the project is expected to boost the development of Van Phong Economic Zone.

The investor proposed building the plant in 2006, and in 2009, the Government agreed the project to be developed under build-operate-transfer (BOT) format.

However, the project has had to wait over 10 years to get the investment certificate due to protracted negotiations on a BOT contract and an assessment of environmental and socio-economic impacts.

According to the management board of Van Phong Economic Zone, ministries and departments have carefully appraised the project’s location, land lease contract, electricity purchase contract and financial feasibility.

In the year to date, there have been three BOT thermal power projects granted investment certificates.

The largest one is Nghi Son 2 thermal power plant project in Thanh Hoa Province invested by a consortium of Marubeni Corporation from Japan and Korea Electric Power Corporation (KEPCO). With registered capital of nearly US$2.8 billion, the plant has a net capacity of 1,200 MW.

In mid-2017, the Ministry of Planning and Investment presented an investment certificate to a Singaporean investor to develop Nam Dinh 1 thermal power project worth more than US$2 billion in Nam Dinh Province.

Covering a total area of 242 hectares in the province’s Hai Hau District, the plant will have a total capacity of more than 1,100 MW.

These projects helped the power generation and distribution sector attract the second largest foreign investment flow in January-November after the processing and manufacturing sector.

According to the Foreign Investment Agency, the sector attracted US$8.37 billion of investment in the year to end-November, accounting for a quarter of the country’s total FDI approvals.

The country now has 18 BOT thermal power projects. Some of them have been put into operation, including Phu My 1, 2 and 3 thermal power plants.

According to the national power planning until 2020, with a vision towards 2030, 16 new BOT power plants will be put into operation in the country by 2030, with a combined capacity of 22,000 MW.

However, experts said thermal power projects will put negative impacts on the environment and suggested the Government suspend a number of projects.

Most thermal power plants are located near the coastline to facilitate the import of coal and the use of water for cooling systems. Therefore, the marine environment could be badly affected.

Besides, the amount of cinder and ash discharged from thermal power plants has amounted to dozens of millions of tons. However, there have been no solutions for effectively treating cinder and ash.

SGT