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EVN needs funds to continue power projects
Electricity of Viet Nam (EVN) is delaying 500 projects in which it has invested to ensure sufficient capital for 40 power plants now under construction.
Twenty-eight of 40 plants now under construction require a total investment of VND26 trillion (US$1.7 billion).
To divert money to these projects, EVN will delay work on projects requiring a total investment of VND1.8 trillion ($10.6 million), EVN general director , Pham Le Thanh, said.
Most of the projects are offices, buildings and other works in which EVN has a stake.
The new measures to generate capital for EVN’s power projects were unveiled after a meeting chaired by Deputy Prime Minister Hoang Trung Hai early this month.
During the meeting, Hai asked EVN to suspend investments in non-electricity projects and to focus its efforts on electric power plants to reduce capital pressure from commercial banks.
Like other State-owned corporations and groups, EVN has invested in a number of projects outside its main business areas, such as banking, insurance, financial services and securities companies.
Thanh was quoted by Lao Dong (Labour) newspaper as saying that the company’s total investment in other sectors accounts for only 3.54 per cent of EVN’s total capital of VND50 trillion ($2.9 billion).
However, Thanh said EVN’s investment in non-electricity projects remained "under control".
Four commercial banks have agreed to maintain provision of loans to EVN’s power projects currently under construction.
Thanh said EVN must pay an annual 21 per cent interest rate on loans.
"No investment project can be profitable with such a high interest rate," he said, adding that the company, however, had no choice but to pay the rate.
He said EVN currently required loans of VND11.85 trillion ($700 million).
EVN has also asked the Finance Ministry to help arrange a loan of $400 million from the Viet Nam Investment and Development Bank so that it can buy equipment for the Son La hydropower plant.
EVN has yet to receive a reply from the Finance Ministry, said Thanh.
In another effort to raise money, EVN has also plans to sell its shares in joint-stock companies, including An Binh Joint-stock Commercial Bank, An Binh Securities Co. and Ha Thanh Securities Co.
Thanh said EVN, however, would maintain its partnership in these joint-stock companies.
He said that EVN would also seek approval from the Prime Minister to set up a finance company to raise money for its projects.
In addition to the plants already under construction, EVN is planning to build several new power plants and will set up joint-stock companies in which each company will contribute less than 30 per cent of capital to the plants.
Thanh said money would be raised by inviting local and foreign strategic partners to buy shares in these power plants.
Director is sorry
General Director of EVN Pham Le Thanh apologised yesterday to electricity users nation-wide for last month’s electricity cuts.
Thanh attributed the power cuts to the ever increasing demand for electricity, technical breakdowns at power plants, delayed projects and lower water levels at reservoirs due to prolonged droughts.
The country now lacks between 2,000-2,500 MW a day. Thanh said the power shortage will last until the end of July but consumers won’t suffer much thanks to additional power projects.
Thanh said the EVN was urging power plants managers to shorten the repair-times of technical breakdowns at power plants. Yesterday morning, EVN group had worked with 11 power companies to appropriately regulate electricity distribution.
Concerning the power shortage, Pham Manh Thang, director of Power Distribution Department, said power demand already exceeded available capacity of EVN. As a result, EVN has to cut its capacity during peak hours to ensure the security of the national power grid.
In order to minimise power cut, EVN had to conduct a specific schedule on power cut and had to inform electricity users before cutting power. By doing so, customers can share difficulties with EVN.
VNS
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