State utility Vietnam Electricity (EVN) group has awarded a $1.3 billion contract to a consortium of Chinese companies to build a coal-fired power plant in Vietnam's southern region, the official Vietnam News Agency reported on Friday.
EVN signed the engineering, procurement and construction contract with the Chengda-Dec-Swepdi-Zepc consortium on Friday to build the 1,245 megawatt Duyen Hai 3 thermal power plant in Tra Vinh province, 250 km (155 miles) south of Ho Chi Minh City, the report said.
Chinese banks will provide loans worth 85 percent of the plant's investment, and the remaining 15 percent will come from EVN's funds, the report said without giving specific details on Chinese companies and banks involved.
The plant with two generators will start operation in the third quarter of 2015, using 3.5 million tons of anthracite coal annually from the northern province of Quang Ninh, Vietnam's coal hub, to generate 7.5-8 billion kilowatt hours of electricity per year.
Duyen Hai 3 plant is part of the Duyen Hai coal-fired power complex, which has a total capacity of 4,200 megawatt. EVN began construction of the $1.5-billion, 1,245-megawatt Duyen Hai 1 plant last September.
Coal will take over from hydro power as the leading fuel for new generators in Vietnam in the next five years, EVN has said.
A power master plan projected that thermal plants in Vietnam will need 67.3 million tonnes of coal a year by 2020, when the fossil fuel may account for almost half its power mix.
In a separate development, Japan's Marubeni Corp said on Friday it had agreed in principle to sell up to 2 million tonnes of Australian or Indonesian coal a year to Vinacomin, Vietnam's top coal mining group, and hopes shipments can start in 2015-16.