Vietnam to buy more China power as shortage worsens
HANOI - Vietnam plans to increase electricity imports from China almost 10 times to up to 1.9 billion kilowatt hour a year between 2006 and 2010 to offset a severe power crunch, state media said on Thursday.
State utility Electricity of Vietnam (EVN) also plans to offer shares worth nearly $900 million in six major power plants next year to raise funds for new plants, while Hanoi is considering raising power rates by 26 percent to lure investors to expand generation, officials said.
The country plans to build 60 additional power plants by 2020 as electricity demand grows at 15-17 percent a year, in line with economic growth of more than 7 percent.
The government this week ordered dominant utility EVN to start negotiations with Chinese power suppliers for the purchases next year, the Saigon Giai Phong newspaper quoted Industry Minister Hoang Trung Hai as saying.
An official from the Ministry of Planning and Investment in charge of the power sector planning told Reuters that they expected to spend around $50 million to $80 million next year on power imports from China.
EVN has doubled purchases of generating capacity from China to 400 megawatts this year to make up for a domestic hydropower shortage caused by a drought. From that capacity, EVN is using output of 200 million kilowatt hour this year.
EVN started buying electricity from China last year, using spare capacity from the border province of Yunnan. Hydropower plants, which produces around 40 percent of the country's electricity, often face temporary shutdown during the dry season, causing nationwide outages.
The Industry Ministry, which oversees the power sector, forecast a shortage of 20.1 billion kilowatt hour during the 2006-2010 period as existing generation capacity fails to meet soaring demand.
No further details were available on the EVN share offer plan. Industry analysts said EVN was likely to sell the shares via public auctions and stakes in each plant would be sold individually with EVN retaining controlling stakes.
Foreigners are allowed to buy, by law, up to 30 percent of any privatised companies' total value.
Vietnam is also reviving a plan to raise electricity rates to 5.96 U.S. cents per kilowatt hour next year from 4.73 U.S. cents to make it attractive for foreign companies to fund new power projects, the newspaper said.
Hanoi planned to increase rates by between 20 and 30 percent last year, but the idea was suspended following protests from businesses and consumers.
State media also reported that EVN would ask the government to ban production and imports of light bulbs that consume too much power and urged consumers to switch to energy-efficient compact fluorescent lamps.
EVN plans to distribute 1 million of free fluorescent bulbs by the end of 2007 to its customers to conserve power, it added.
Reuters - September 15, 2005.
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