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Nghi son 2 Thermal Power Plant BOT contract officially signed

Korea Electric Power Corp. (KEPCO) has signed a deal with the Vietnamese government to build a thermal power plant in the Southeast Asian country, the Korean utility company said Thursday.

According to KEPCO, it finalized the $2.3 billion (2.56 trillion won) contract with Vietnam's Ministry of Industry and Trade and Electricity of Vietnam (EVN) in Hanoi, Wednesday.

Under the deal, KEPCO and its Korean and Japanese partners, including Japan's Marubeni Corp, will build a 1,200-megawat (MW) plant, produced by two units of 600MW each, at the Nghi Son Economic Zone in the central province of Thanh Hoa. KEPCO said it will break ground this year and complete the project in 2021.

The consortium previously won the Nghi Son 2 project in 2013 _ the first international tender for a large-scale coal-fired power plant in Vietnam. It is also KEPCO's first-of-its-kind power plant there.

KEPCO said the Export-Import Bank of Korea (Eximbank) will finance 75 percent of the build-operate-transfer (BOT) project this year through project financing.

Once completed, KEPCO, holding a 50 percent stake in the plant, will operate it for 25 years before transferring it to the Vietnamese. All electricity produced at the plant will be sold to EVN under the power purchase agreement.

"We are estimating the revenue will be 15 trillion won for 25 years," a KEPCO official said.

Doosan Heavy Industries and Construction will be in charge of design and equipment supply as well as installation and test operations.

"The Nghi Son 2 project is a huge achievement as KEPCO seeks to build a global energy belt connecting North America, South America, Africa, the Middle East and Asia," KEPCO CEO Cho Hwan-eik said.

Since KEPCO began its first international business in the Philippines in 1995 under a rehabilitate-operate-manage-maintain agreement with the Malaya Thermal Power Plant, the company has gained a presence in the global market.

The firm, headquartered in Naju, South Jeolla Province, is engaged in a variety of overseas businesses in 22 countries, including coal and nuclear power plants and resources development.

Since December 2009, KEPCO has been undertaking a $20 billion project to build the Barakah Nuclear Power Plant in the United Arab Emirates, in cooperation with local builders and other contractors.

Last year, the company won a $49.4 billion contract to operate the nuclear power plant for the next 60 years.

KEPCO expects those achievements will facilitate its campaign to secure additional projects in the Middle East countries, which seek to generate power in an environmentally sustainable and cost-effective manner in the post-oil era.

Source: Korea Times