Oil Report

UPDATE 1-EDF to invest $4 bln in Vietnam power plant-report

(Adds details)

HANOI, Sept 25 (Reuters) - French utility EDF EDF.PA plans to invest $4 billion in a coal-fired power plant in Vietnam's Mekong Delta province of Hau Giang, a state-run newspaper said on Tuesday.

The government has approved the project and EDF was studying a site at Song Hau industrial park in the southern province to build the plant, the Tien Phong (Vanguard) newspaper quoted EDF country director Yves Desbazeille as saying.

The plant will have a total capacity of 3,600-MW, making it the country’s biggest coal-fired electricity generator, the report said.

EDF now operates a 700-MW gas-fired power plant in Phu My complex in the southern oil hub province of Ba Ria-Vung Tau.

A host of foreign utility firms have expressed interest in building coal-fired power plants to cash in on the country’s soaring energy demand.

Japanese utility J-Power 9513.T also planned to invest $2.4 billion in a coal-fired power plant in Ba Ria-Vung Tau. Last week, the Asian Development Bank said it would lend nearly $1 billion to build a big coal-fired plant in northern Vietnam.

This week, the government urged dominant utility Vietnam Electricity to speed up negotiations with coal exporters in Indonesia and Australia for long-term supply to power plants in the country’s central and southern region.

Vietnam is a net exporter of anthracite coal, with January-August sales up 18.8 percent to nearly 21 million tonnes. Coal accounts for about 12 percent of the country’s power generation.

Hanoi plans to double power generation capacity to about 28,000 MW by 2010 to meet forecast annual demand growth of about 20 percent as the economy continues to expand.

The government has encouraged private investors to finance power projects, which are expected to cost about $14 billion in the 2007-2010 period to fuel an economic expansion of up to 9 percent a year.