Saudi-Korean tie-up to develop 1.2GW Vietnam plant

The $2.2bn transaction marks the first investment made by the two firms in the country.

A consortium comprising Saudi Arabia’s ACWA Power and South Korea’s Taekwang Power has agreed to invest more than $2.2 billion in the Nam Dinh 1 Thermal Power Plant Project.

The project financing structure comprises 75 percent of debt and 25 percent of equity, according to Taekwang Power’s company website. Further financial details were not disclosed. 

The power plant, which has a planned capacity of 1,200 megawatts (MW), will be built in northern Vietnam’s Nam Dinh province under the Build-Operate-Transfer (BOT) model for 25 years. 

The project is expected to generate power from coal supplied by Vietnam National Coal-Mineral Industries, a state-owned mining firm. 

“This agreement is an important stepping stone for our first project in Vietnam,” said Rajit Nanda, chief investment officer of ACWA Power, in a statement.

The local government expects to provide the investment licence, financial arrangement and land clearance for the project’s commencement by the middle of this year. The plant is expected to become operational by December 2020. 

Vietnam has been striving to boost its power generation capacity in recent years in an effort to accommodate increasing electricity demands amid faster industrialisation and economic growth. 

The country currently relies mostly on large hydropower, coal and gas to meet its electricity needs. It plans to increase its coal-fired generating capacity from 36 percent in 2015 to 56 percent by 2030, according to US Energy Information Administration.