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EVN seeks loans to fund power transmission projects
Electricity of Viet Nam (EVN) is seeking loans from international finance organisations and domestic commercial banks to fund power transmission projects.
Nguyen Manh Hung, General of the National Power Transmission Corporation under EVN (EVNNPT), said capital shortage for power transmission projects could lead to more power outages in the southern key economic zone as well as HCM City in 2013.
Speaking at a forum in HCM City yesterday, Hung said EVN and EVNNPT had a social responsibility to keep power prices unchanged as part of the fight against inflation.
Loans from finance organisation and banks would be crucial in developing transmission projects, he said.
Under the national power plan, the country will need a maximum of 210 billion kW per hour by 2015 and 362 billion kW per hour by 2020.
EVNNPT said that within five years it must set up 350 transmission projects, with an estimated capital of VND76 trillion (US$3.6 billion).
This means the corporation needs about $723 million a year during that period.
"We highly regard EVNNPT's reputation in making payments, so we have pledged to loan the corporation the maximum amount permitted by the State Bank," said Ta Minh Hieu, deputy director of An Binh Bank.
Hieu also said his bank could help other commercial banks with capital to loan EVNNPT.
However, of the 20 banks represented at the forum, An Binh Bank was the only one that said it was willing to lend money to the EVNNPT for its power transmission projects.
Most of the banks are concerned about the capacity to make principal payments as well as interest-rate payments.
"Banks are concerned that effectiveness of investment would be low because of the low power tariffs in the country," said Vu Tran Nguyen, EVNNPT's deputy general director.
"But the corporation has endured a low tariff to benefit society. Thus banks should work with us to share social responsibility."
The Asian Development Bank (ADB) said the domestic banks should not be worried because international finance organisations, including the ADB and World Bank, could back up EVNNPT transmission projects, said Anthony Jude, ADB's principal project specialist.
Hung said investment would become even more effective when a new power tariff is imposed next year.
"The Government has committed to organisations like ADB and the World Bank to increase power tariffs. Our power rates are lower than those in other countries in Southeast Asia," he said.
He added that the cost for power transmission in Viet Nam was one of the lowest in the world, saying a kW per hour sold in Viet Nam for VND1,250 (six US cents). The cost for transmission of one kW per hour is 6 per cent of the selling price.
The power tariff in Indonesia is $6.9 cent per kW per hour.
"Indonesia exports coal and gas so the government subsidises the electricity sector. Every year, they subsidise $5-7 billion directly to the electricity sector," Jude said.
He expressed concern over how Viet Nam could develop if it continued to have low tariffs and with no subsidy from the government.
"Power tariffs must be increased to meet commitments we have made because we cannot delay power transmission projects," Hung said.
"They are needed to ensure an adequate power supply for the continued development of the country," he added.
ADB and the World Bank both require warranties from domestic banks when they offer loans.
Vietinbank has been authorised by the Government to chair a committee on the issuance of warranties as well as coordinate the mobilisation of capital for EVNNPT.
vietnamnet, VNS
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