Saudi’s ACWA Power reaches key milestone for Nam Dinh 1 thermal power project
The 1,200MW Nam Dinh 1 thermal power plant is being developed on a build-operate-transfer basis over a 25 year term with total project cost of approximately $2.3bn, 25% of which is funded with sponsors’ equity
The Ministry of Planning and Investment of Vietnam has issued the Investment Registration Certificate (IRC) to Nam Dinh First Power Holdings, a Singapore-based Joint Venture incorporated by Saudi Arabia’s ACWA Power and South Korea’s Taekwang Power Holdings (“Investors”), to implement the 1,200MW Nam Dinh 1 Thermal Power Project (“the Project”) in Hai Hau district of Nam Dinh province, Vietnam.
The ceremony of IRC granting was held today in Nam Dinh City, Nam Dinh Province in the presence of representatives from Vietnam government agencies including the Ministry of Planning and Investment, Ministry of Industry and Trade, Nam Dinh People’s Committee, State Bank of Vietnam, Embassy of Republic of Korea and the Investors. The Investment Registration Certificate is one of the most important milestones for the Project pursuant to the Investment Agreement signed between the Ministry of Industry and Trade and the Investors in January 2016.
The 1,200MW Nam Dinh 1 thermal power plant is being developed on a build-operate-transfer basis over a 25 year term with total project cost of approximately 2.3 billion USD, 25% of which is funded with Sponsors’ equity and the remainder with project finance from international financial institutions. The Project will use domestic anthracite coal provided by the state coal mining group Vinacomin. Electricity will be dispatched to the national 500kV grid and wholly purchased by Electricity of Vietnam.
At c. 7,800 GWh, the Project will make a significant contribution to power generation capacity in the northern part of Vietnam, in line with development strategy of power sector envisaged in Master Plan VII of Vietnam. The investment in Nam Dinh 1 project with international financing partners will support the government’s endeavour to meet the projected growth in power demand from year 2020 onwards.
Paddy Padmanathan, President & CEO of ACWA Power said: “While the granting of the IRC represents a significant step in the development of this project, more importantly it demonstrates the commitment of the Vietnamese government to protect foreign investors and to encourage the participation of private investors in infrastructure expansion in the country. We look forward to completing the financing arrangements and commence construction of the power plant to enable us to contribute to the development of Vietnam by delivering reliable, safe and cost effective electricity.”
Rajit Nanda, Chief Investment Officer at ACWA Power said: “Ceremonies like the one taking place today reaffirm ACWA Power’s commitment to Vietnam. The country has built a comprehensive plan for power delivery and paired it with a robust legal and economic system that encourages private international investment in critical infrastructure projects. We look forward to supporting Vietnam in meeting its energy needs over decades to come.”
The project is scheduled to commence construction in early 2018 and the expected date of commercial operation will be 51 months for the first unit and 57 months for the power facility, from the date of commencement of construction. Term of operation of the BOT contract is 25 years from the commercial operation date of the power facility, after which the project company will be responsible for transferring the power facility and related assets to Vietnam Government.