If Build-Operate and Transfer (BOT) contract is signed in January 2010 for Mong Duong 2 thermo power project, Foreign Direct Investment (FDI) capital inflow into power sector will be a major point in 2010.
The Mong Duong 2 thermo power project co-proposed by American Electric Supply, Inc (AES) and Vietnam National Coal and Minerals Industries Group (Vinacomin) with a total investment of $1.4 billion and an estimated capacity of 1,200MW is showing many positive signals when issues of BOT contract is gaining consensus amongst partners.
Even the electricity price, which is a great issue in the electricity sector, almost finds common voice between investors and the Electricity of Vietnam (EVN).
Thus, it's likely that the Mong Duong 2 project will start a banner year of electricity sector in attracting FDI after about four years of negotiations (since 2006). Even some FDI specialists said that if the BOT contract for the Mong Duong 2 project is signed, it will be regarded as a "framework" for other BOT projects in power sector.
Currently, along with Mong Duong 2 project is a series of other BOT projects to build coal –fired thermo power plants such as Vinh Tan 1 power plant project invested by Southern Power Grid Co, State Grid Corporation of China (SGCC) and Vinacomin, with total capacity of 1,200MW, BOT project for Hai Duong thermo power plant proposed by Malaysia-based Jaks Resources Berhad Group proposed, with a total estimated investment capital of about $1.4 billion.
Obstacle of most BOT projects in the electricity sector comes from the disagreement in power price negotiations and related mechanisms between investors and EVN. Electricity price negotiation period often takes a long time, even to six years as the case of BOT project for Phu My 2.2 project and Phu My 3 project (these are two successful FDI projects in the electricity industry for far).
In related news, according to EVN, in 2010, EVN will invest some 58.5 trillion dong for power projects, increasing 10.8 trillion dong against the investment of 2009 and marking the highest level so far.
With this huge investment capital source, EVN will continue some projects like Mong Duong 1, Vinh Tan 2, Duyen Hai 1, Lai Chau hydropower and O Mon complex and put seven projects into operation such as Quang Ninh, Hai Phong, Ban Ve hydropower, first generator of Son La hydropower with a total capacity of 2,130MW.
EVN also proposed ministries of industry and trade, planning and investment and finance to arrange capital from state budget for EVN's projects in 2010 and give priorities in using ODA capital for EVN's projects.
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