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State-owned Electricity of Vietnam Group (EVN) is seeking approval from the Ministry of Industry and Trade (MoIT) to increase power prices this month.
EVN wants to raise power prices from September
EVN Deputy General Director Duong Quang Thanh said the group is considering production costs before deciding the exact level of the price hike.
“We are calculating the costs and waiting for approval from the MoIT,” Thanh noted.
MoIT Deputy Minister Hoang Quoc Vuong has declined to comment on the issue.
In its proposal to the MoIT, EVN said that the price hike is expected to balance its financial resources and prevent any possible losses from 2012.
EVN complained that it is facing increasing difficulties in raising capital due to mounting losses. The group lost over VND2 trillion (USD96 million) in the first eight months of this year, in addition to a loss of over VND8 trillion (USD384 million) in 2010.
The group has yet to raise capital for its Duyen Hai 1 and Vinh Tan 2 thermal power plants over the past year.
It is also in desperate need of capital to fuel the 500-kV Pleiku-My Phuoc-Cau Bong power transmission line.
If these projects are not carried out on time, it may compound power shortages in southern Vietnam between 2013 and 2015.
In addition to the proposal for the power price hike, EVN asked the Ministry of Finance and the State Bank of Vietnam (SBV) to further guarantee its bank loans.
According to Thanh, EVN needed a total of VND832 trillion (USD39.9 billion) for the implementation of the national power development plan by 2015 or Plan VI, but was some VND599 trillion (USD28.75 billion) short.
Trinh Viet Thang, Deputy General Director of PV Power, a subsidiary of PetroVietnam, supported EVN’s power price hike proposal. PV Power plans to increase its power capacity to 20-25% of the national power output by 2015.
Thang said, “The current power prices are unattractive to both domestic and foreign investors. The increase in power prices is expected to foster the implementation of the national power development plant for the 2011-2020 period, or Plan VII.”
He blamed capital shortfalls for the stagnant implementation of the Plan VI, which may also affect the pace of the Plan VII.