AES Corp. switches on 1,240 MW coal-fired plant in Vietnam
The AES Corp. achieved commercial operation of its 1,240 MW coal-fired Mong Duong 2 power plant in Vietnam six months ahead of schedule
The power plant was built under a build-operate-transfer agreement and has a 25-year power purchase agreement with Electricity of Vietnam (EVN), a state-owned utility, as well as 25-year coal supply agreement with Vinacomin, a state-owned entity.
The PPA includes a capacity payment denominated in U.S. dollars and a fuel pass-through that protects the project from fluctuations in coal prices. AES has a 51 percent equity interest in the $1.95 billion power plant, while PSC Energy Global Co., Ltd., a unit of POSCO Power Corp., and Stable Investment Corp., a unit of China Investment Corp., own 30 percent and 19 percent, respectively.
Mong Duong 2 was financed with $1.5 billion in non-recourse debt. The plant is the largest private sector power project in Vietnam and is the country’s first new private sector power plant to be commissioned in the last ten years.
According to the Vietnam institute of Energy and the National Center for Socio-Economic Information and Forecast, Vietnam’s power demand and GDP are expected to grow by 10.5 percent and 6.5 percent, respectively, over the next five years. The government of Vietnam has future plans to increase the country’s installed capacity by more than 60 GW over the next five years.
Mong Duong 2 complies with the Vietnam and World Bank environmental standards and also allows lenders to meet the requirements of the Equator Principles. Mong Duong 2 is located in the Quang Ninh province of Vietnam.