Van Phong power station

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Van Phong power station is an operating power station of at least 1432-megawatts (MW) in Nihh Hoa, Khanh Hoa, Vietnam with multiple units, some of which are not currently operating.

Location

Table 1: Project-level location details

Plant name	Location	Coordinates (WGS 84)
Van Phong power station	Nihh Hoa, Khanh Hoa, Vietnam	12.47704, 109.29244 (exact)

The map below shows the exact location of the power station.

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Unit-level coordinates (WGS 84):

• Phase 1 Unit 1, Phase 1 Unit 2, Phase 2 Unit 1, Phase 2 Unit 2: 12.47704, 109.29244

Project Details

Table 2: Unit-level details

Unit name	Status	Fuel(s)	Capacity (MW)	Technology	Start year	Retired year
Phase 1 Unit 1	operating	coal - bituminous	716	supercritical	2023	–
Phase 1 Unit 2	operating	coal - bituminous	716	supercritical	2024	–
Phase 2 Unit 1	cancelled	coal - unknown	660	unknown	–	–
Phase 2 Unit 2	cancelled	coal - unknown	660	unknown	–	–

Table 3: Unit-level ownership and operator details

Unit name	Owner
Phase 1 Unit 1	Van Phong Power Company Ltd
Phase 1 Unit 2	Van Phong Power Company Ltd
Phase 2 Unit 1	Hanoi Industrial Construction and Investment, Keangnam Enterprises Ltd
Phase 2 Unit 2	Keangnam Enterprises Ltd, Hanoi Industrial Construction and Investment

Project-level coal details

• Coal source(s): Indonesia and Australia

Financing

• Source of financing: Vân Phong-1: Japan Bank for International Cooperation (US$1.5-US$1.8 billion); Sumitomo Mitsui Financial Group (SMFG), Mizuho Financial Group (Mizuho), Mitsubishi UFJ Financial Group (MUFG), DBS Bank, OCBC Bank, Bank of China (US$ 1.998 million); US$1,001 million in equity from Sumitomo Corporation

Background

In January 2011, the Van Phong Economic Zone Management Authority approved a plan by the Sumitomo Corporation to build the two-unit, $2 billion, 1,320-MW, coal-fired Vân Phong-1, as part of a port-industrial complex being planned in Vân Phong Bay. In November 2012, with only site clearing completed, the Vietnamese government urged Sumitomo to line up investors by June 2013 or risk having the project ceded to other investors.

In August 2013, Sumitomo contracted Finnish company Pöyry to build the plant. As of November 2013, however, Sumitomo was still having trouble with negotiations with the Vietnamese government; the current plan is for construction to begin in April 2015, and for the plant to go online in 2019. However, this timeline involved Sumitomo signing a BOT contract in early 2014, and getting the final license in July 2014; as of November 2014, though, the BOT contract had not yet been finalized.

As of April 2016, Sumitomo was having trouble with compensation, and some families were still living on the project's site. In July 2016, Sumitomo negotiated the location of a transmission line with provincial officials. In August 2016, the provincial premier met with the Ministry of Industry & Trade to push for the acceleration of the project. At the time, the schedule called for construction by the end of 2017, and completion in 2021.

In a March 2017 meeting with provincial officials, Sumitomo said its schedule was to apply for investment certificates by the end of June, and to begin construction by the end of the year.

In May 2017, Sumitomo signed and investment agreement with the Ministry of Industry and Trade, and December 2017 the company received an investment certificate to development the plant. Work will start in 2018.

In March 2018, the environmental impact assessment was approved.

In June 2019 the completion date for Unit 1 was delayed to 2023 and the completion date for Unit 2 was delayed to 2024 in the Ministry Of Industry And Trade's report on the implementation of the revised seventh Power Development Plan (PDP7).

In August 2019 Sumitomo announced that construction of Vân Phong-1 had begun. However satellite photography from Planet shows only ground-clearing occurring between July 2019 and December 2019, not actual construction. As of December 2019 GreenID continued to list the plant as Permitted. In February 2020 the National Steering Committee on power development stated that Unit 1 was scheduled to be commissioned in November 2023 and Unit 2 in March 2024. In May 2020 it was reported that engineering plans and the procurement of supplies and materials from China are being delayed because of Covid-19-related travel restrictions and logistical problems.

In April 2021, construction began on the steel structure for Van Phong-1 Unit 1's coal-fired boiler. Lilama 18 Joint Stock Company is the contractor in charge of installing 2 boilers, each with capacity of 660 MW, and each with a contract value of USD 28.6 million.

According to PDP7, phase I of the project is scheduled for completion in 2022 and 2023. Phase II of the project is cancelled.

On July 4, 2022, the Ministry of Industry and Trade appeared to provide an update on the draft PDP. The document’s list of major power projects planned for 2021-2030 (PDF pages 18-20) includes the project with target completion dates of 2023 and 2024 for units 1 and 2 respectively. Construction was reportedly 70.52% complete.

In October 2022, the project's related substation and transmission lines were reportedly nearing completion. According to scheduling approved by the project's investors, these elements must be finished by December 26, 2022.

In December 2022, the project was reportedly 87% complete. Commercial operation for Units 1 and 2 was expected in August 2023 and December 2023 respectively.

In May 2023, Vietnam officially approved the updated power development plan (PDP8). Under this plan, the country will domestically generate 20% of its electricity needs with coal by 2030 and fully phase out coal-fired power stations by 2050. The plan involved increasing energy generation using coal to a peak of 30 GW and replacing all other outstanding coal projects with LNG or renewables. PDP8 listed Van Phong I among the projects under construction, with an updated capacity of 1,432 MW.

In September 2023, construction of Unit 1 was completed. Final inspection work was underway to prepare for commercial operation.

In October 2023, Unit 1 was approved for commercial operation. In December 2023, Unit 2 was approved for commercial operation. Unit 1 was officially inaugurated in December 2023. Unit 2 was officially inaugurated in March 2024.

Financing

In August 2018 a report by Market Forces found that Vân Phong-1 may not be eligible for financing from the Japanese banks SMBC, MUFG, and Mizuho because of their policies that rule out financing supercritical coal plants.

In April 2019 the Japanese Bank For International Cooperation (JBIC) agreed to loan up to approximately USD 1.199 million to Van Phong Power Company Limited (VAN PHONG) for Van Phong-1. The loan is co-financed with Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited, Oversea-Chinese Banking Corporation Limited and DBS Bank Ltd., and the Bank of China, with a total co-financing amount of approximately USD 1.998 million. US$1,001 million in equity was provided by the Sumitomo Corporation. The Sumitomo Mitsui Banking Corporation acted as financial adviser to the sponsor. Nippon Export and Investment Insurance (NEXI) provided political risk coverage for the deal.

Sumitomo's Coal Policy

In August 2019 a group of Japanese NGO's including JACSES, Kiko-Network, FOE Japan, Mekong Watch and 350 Japan released a statement calling on Sumitomo to withdraw from Vân Phong-1 because the project conflicts with Sumitomo's policies on coal plant construction. Sumitomo had stated a general policy of not developing new coal-fired plants in its "Integrated Report 2019," but also stated that it might support individual projects on a case-by-case basis.

Vân Phong-2

In October 2014, Korean company Keangnam Enterprises and Vietnamese company Hanoi Industrial Construction and Investment JSC signed an initial agreement with Khanh Hoa provincial government to build the additional two-unit, 1,320-MW coal-fired Vân Phong-2 power plant. The next step for the potential developers was to undertake a feasibility study. Construction was scheduled to begin in 2017, and completion for 2020.

Articles and Resources

Additional data

To access additional data, including an interactive map of coal-fired power stations, a downloadable dataset, and summary data, please visit the Global Coal Plant Tracker on the Global Energy Monitor website.