EVN to borrow ~$700 million for Lai Chau hydropower plant

EVN clinched an agreement with Bank for Foreign Trade of Vietnam (Vietcombank) for a loan of VND14.5 trillion to build Lai Chau hydropower plant, with a total cost of VND35.7 trillion is expected to provide about 4.6 billion kWh of electricity annually. EVN fired its chairman last year after losing as much as 13.3 trillion dong ($635 million) in two years. The company is building a 33-story, twin-tower headquarters of glass and steel next to the centuries-old traditional houses of Hanoi’s old quarter.

Lai Chau hydropower plant project, comprising of three turbines with a total designed capacity of 1,200 MW, is the final hydropower project on the Da River approved by the Prime Minister. The plant with a total cost of VND35.7 trillion is expected to provide about 4.6 billion kWh of electricity annually.

Lai Chau hydropower plant started construction in January, 2011. EVN and a consortium of Hydrochina Zhongnam and ALSTOM contractors have signed a bidding package for electrical and mechanical equipment for the project.

The first turbine of the plant will generate electricity in 2016, with the whole scheme set for completion in 2017.

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Source:  EVN borrows VND14.5 trillion for Lai Chau hydropower plant, Jul 12, 2013

Vietnam Tries to Tame Its Corporate Offspring  Vietnam Electricity, or EVN, fired its chairman last year after losing as much as 13.3 trillion dong ($635 million) in two years. The company is building a 33-story, twin-tower headquarters of glass and steel next to the centuries-old traditional houses of Hanoi’s old quarter.

“The way they’ve done it in the past has been to equitize, not privatize, which typically means selling 10 or 20 percent with no ability for the new investors to exercise control, and with the previous management staying in place,” said Louis Taylor, Vietnam chief executive for Standard Chartered Plc (STAN).

Full privatization “would require relinquishing of state control over many industries, and I’m not sure that’s on many people’s agenda,” Taylor said.

Often, the shares are sold to local authorities, government ministries, or other state companies, said Pincus.

“What was once an ideologically motivated decision to retain industrial and commercial power in the state sector has been cemented in place by interests that profit from the absence of both market competition and administrative discipline,” he said.

The kinds of changes required, such as introducing more competition, creating independent regulatory agencies and enforcing corporate governance codes mandating independent directors, would challenge the concentration of economic power in the hands of a loyal political elite, according to Pincus.

“You have to watch out that what you think might be some kind of reform of the state-owned enterprises doesn’t actually become a new form of crony capitalism,” said Burghardt, a former U.S. ambassador.