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EVN may use foreign money to invest in power plants   2009-01-22 - TBKTVN

The Ministry of Industry and Trade has submitted to the government a plan on raising electricity prices by 10% in 2009, an increase that is much lower than the level suggested by the Electricity of Vietnam (EVN).


Dang Hoang An, Deputy General Director of EVN

How will the price increase, if approved, affect the business and investment plans of EVN in 2009? Answering the question, Dang Hoang An, Deputy General Director of EVN, said:


The electricity price is decided by the Ministry of Industry and Trade and the government.


Regarding the price increases suggested by EVN, we made suggestions after thorough consideration in order to ensure enough capital for the investment and development of the power industry in the upcoming years. You may know that EVN once had to ‘give back’ 13 power projects to the government, and it was because of lack of capital.


EVN needs a huge sum of capital, estimated at VND50tril, in 2009 for its investment projects. Therefore, we will have to seek capital from many different sources. For example, we may have to sell more stakes of equitised companies, equitise some other companies or seek foreign loans.


EVN complains that it is lacking capital, but it has stated that it will push up investments in 2009. How can we understand this?


Making investment is our top priority task, and we have to make investment in order to ensure enough electricity this year. We have to make every effort to put nine power plants with the capacity of 2,996 MgW into operation this year.


We have to push up investment even though we lack capital. Otherwise, the nine power plants may not be put into operation this year as scheduled.


Regarding investment capital for EVN, the prime minister informed the National Assembly that EVN needs some VND882tril for the period from now to 2015.


The pushing up of EVN’s investment this year means that EVN does not lack capital for short-term investment, but we need to look for more and more capital for long-term investment.


However, experts believe that EVN still could arrange enough capital if it tried to save costs and reduce electricity losses during transmission.


I can say that the turnover of VND57tril, an increase of 13% over 2007, obtained by EVN in 2008, is partially thanks to thrift. We have settled VND761bil worth of unused materials, VND132bil worth of debts and saved VND235bil in expenses.


However, the figures prove to be too small if compared to the capital needed to invest in a project or a power plant. A power plant project needs tens of billion VND. Therefore, it is illogical to think of using the sum of saved money to invest in power projects.


Regarding the reduction of electricity losses from transmission, I can say that we lowered the loss to a one digit level in 2008, at 9.35%.


You have said that EVN has been trying to reduce losses in electricity transmission. Why are unexpected electricity cuts still occurring?


There are two problems.


First, we had to cut electricity sometimes because we still lacked electricity. EVN planned to provide 77.2bil kwh in 2008, but we could only provide 74bil kwh, as EVN was only able to purchase 21.08bil from non-EVN plants of the 24.11bil it planned to purchase.


* EVN plans to produce and purchase some 83.6bil kwh this year, of which it will purchase 25.5bil kwh, an increase of 1bil kwh over 2008.

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