Van Phong power station

From Global Energy Monitor

Vân Phong power station is a 1,320-megawatt (MW) coal plant under development in Khánh Hòa province, Vietnam. A further 1,320 MW were proposed, but those plans were cancelled.

Location

The map below shows the location where the plant would be built, in Ninh Phước commune, Ninh Hòa township, Khánh Hòa province.[1]

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Background

Vân Phong-1

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.[2] 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.[3]

In August 2013, Sumitomo contracted Finnish company Pöyry to build the plant.[4] 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.[5] 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.[6]

As of April 2016, Sumitomo was having trouble with compensation, and some families were still living on the project's site.[7] In July 2016, Sumitomo negotiated the location of a transmission line with provincial officials.[8] 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.[9]

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.[10]

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.[11]

In March 2018, the environmental impact assessment was approved.[12]

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).[13]

In August 2019 Sumitomo announced that construction of Vân Phong-1 had begun.[14] 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.[15] 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.[16] 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.[17]

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.[18]

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.[19] 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.[19]

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.[20] 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.[21] US$1,001 million in equity was provided by the Sumitomo Corporation. The Sumitomo Mitsui Banking Corporation acted as financial adviser to the sponsor.[22]

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.[23]

Revised Power Development Plan VII

According to PDP7, phase I of the project is scheduled for completion in 2022 and 2023. Phase II of the project is cancelled.[24]

Project Details

  • Sponsor: Sumitomo Corporation (Vân Phong-1); Keangnam Enterprises and Hanoi Industrial Construction and Investment JSC (Vân Phong-2)
  • Parent company:
  • Location: Ninh Phước commune, Ninh Hòa township, Khánh Hòa province, Vietnam
  • Coordinates: 12.47704, 109.29244 (exact)
  • Status: Construction (Vân Phong-1); Cancelled (Vân Phong-2)
  • Gross Capacity: Vân Phong-1: 2 x 660 MW; Vân Phong-2: 2 x 660 MW
  • Type: Supercritical (Vân Phong-1)
  • Projected in service: Vân Phong-1 Unit 1: 2023; Vân Phong-1 Unit 2: 2024
  • Coal Type: Bituminous
  • Coal Source:
  • Source of financing: Vân Phong-1: Japan Bank for International Cooperation (US$1.5-US$1.8 billion); [25][12] Sumitomo Mitsui Financial Group (SMFG), Mizuho Financial Group (Mizuho), Mitsubishi UFJ Financial Group (MUFG), DBS Bank, OCBC Bank, Bank of China (US$ 1.998 million);[26] US$1,001 million in equity from Sumitomo Corporation[22]

Articles and resources

References

  1. Van Phong Coal Thermal Power Plant, Wikimapia, accessed Apr. 2015.
  2. Green Light for Van Phong Projects, Vietnam Investment Review, Jan. 16, 2011.
  3. Power Investors Set to Enter Last Chance Saloon, Vinacomin website, Nov. 26, 2012.
  4. Pöyry Awarded Owner's Engineer Services Assignment for Van Phong 1 Coal-Fired Power Plant Project in Vietnam, Pöyry press release, Aug. 1, 2013.
  5. Sumitomo Red Tape Tangle Delays Power Plant Project, Vietnam Investment Review, Nov. 25, 2013.
  6. Red tape thwarts energy investors, Viet Nam News, 19 Nov. 2014.
  7. Dự án Nhà máy Nhiệt điện Vân Phong 1: Chưa thể khởi công, Bao Khanh Hoa, 4 Apr. 2016.
  8. Dự án nhà máy nhiệt điện BOT Vân Phong 1, EVN Khanh Hoa press release, 5 July 2016.
  9. Khởi sắc ở Nam Vân Phong, Van Phong Economic Zone website, 2 Nov. 2016.
  10. Nhiệt điện Vân Phong 1 sẽ khởi công cuối năm 2017, Cong Thuong, 2 Mar. 2017.
  11. "Japanese firm gets nod to build US$2.58-billion thermal power plant," Vietnam.net, 4 December 2017
  12. 12.0 12.1 "Van Phong 1 (1320 MW)," Market Forces, updated March 24, 2018
  13. Implementation of Power Projects iIn the Revised Power Development Plan 7, Ministry of Industry and Trade, Republic of Vietnam, Jun. 4, 2019
  14. Construction Commences on Van Phong 1 Coal-fired Power Project in Vietnam, Sumitomo Corporation, Aug. 26, 2019
  15. Communication with GreenID, December 2019
  16. Tình hình thực hiện các dự án điện theo hình thức BOT ở Việt Nam, Feb. 14, 2020
  17. Covid-19 tác động tới tiến độ nhiều dự án điện, Bao Dau Thau, May 6, 2020
  18. Commencement of installation of steel structure for boiler No. 1 of Van Phong 1 điện thermal power project, Báo Công Thương, Apr. 20, 2021
  19. 19.0 19.1 Sumitomo Corporation Must Aim at Complete Coal Phase-Out to Combat Climate Change, FOE Japan, Aug. 21, 2019
  20. These 3 Coal Plants Might Not Get Japan Funds Under New Rules, Bloomberg, Aug. 27, 2018
  21. Project Finance for Van Phong 1 Coal-Fired Power Generation Project in the Republic of Vietnam, JBIC, Apr. 19, 2019
  22. 22.0 22.1 "Preview of Van Phong 1 Coal-Fired Power Plant (1.32GW) IPP | Transaction | IJGlobal". ijglobal.com. Retrieved 2020-11-20.
  23. Nhà máy nhiệt điện Vân Phong 2: Dự kiến khởi công vào năm 2017, Khanh Hoa Online, 28 Oct. 2014.
  24. DANH MỤC CÁC DỰ ÁN NGUỒN ĐIỆN VÀO VẬN HÀNH GIAI ĐOẠN 2016 - 2030, Ban hành kèm theo Quyết định số 428/QĐ-TTg ngày 18 tháng 3 năm 2016 của Thủ tướng Chính phủ (LIST OF POWER PROJECT IN OPERATION PERIOD 2016 - 2030, Issued together with Decision No. 428 / QD - TTg of March 18, 2016 by the Prime Minister)
  25. Sumitomo and Hanoinco Plan Project Financing for Van Phong I Thermal Power Plant in Vietnam, ResearchViews, Nov. 26, 2012.
  26. Japanese Banks: Respect Your Committments, Market Forces, Apr. 19, 2019

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