Prime Minister Nguyen Tan Dung met with the Electricity of Vietnam group (EVN) on February 24 to see its business plan to 2010. The Government Office has issued an announcement about the PM’s decisions after this meeting.

According to the PM, shortage of power was a big problem in 2008. Power cut happened everywhere, striking production and daily life. The construction pace of many power plants and power networks was slow, affecting power supply in the upcoming years.

Electricity generated by power plants under the aegis of EVN accounts for nearly 70% of the total output. This rate may fall in the near future but EVN and State-owned power producers must still take the key role.

As of March 1, when the power charge increases, service quality must rise. Power saving is a must. The average per capita electricity consumption in Vietnam is low but the use of electricity is ineffective. In many countries, when GDP rises by 1%, power consumption increases less than 1% but in Vietnam, when GDP grows 1%, electricity use rises by nearly 2%.

One of the key solutions to save electricity is not developing projects that use outdated and power-intensive technology.

Power projects will be given priority to have access to soft credit and official development assistance (ODA) capital but the government asked EVN to take initiative in seeking other sources of capital, such as commercial loans, issuing bonds, etc.

It is necessary to form a competitive power market to archive the goal of having stable power sources of supply, improved quality and attracting investment from all economic sectors.

The PM asked EVN to systematically carry out power plant, power grid and power distribution projects in 2009 to ensure power security. Particularly, EVN will have to directly sell electricity to communes so that by 2010, farmers will buy electricity at the state regulated prices.

The PM told EVN to prepare to meet the increasing need for electricity, which is estimated at 14-15% higher than 2008; to arrange capital to invest in power plant projects in order to have around 2,300 MW of electricity from new power plants.

The PM asked the Ministry of Industry and Trade to review and amend the 6^th electricity production plan and prepare the 7^th electricity production plan. The Ministry is responsible to make forecast about the increase of demand for power and suggest new power projects.

Incapable Investors in power projects will have to hand over their projects to other groups. Accordingly, the Vietnam Oil and Gas Group (PetroVietnam) will develop gas-fuel power plants. The Vietnam Mine and Mineral Group will develop coal-fueled power projects and be responsible to provide coal to these plants. The Vietnamese government encourages foreign investors to invest in electricity generating projects.

The Ministry of Industry and Trade takes responsibility to balance sources of fuels for power production to 2015.

It is necessary to review the equitisation of power plants.

The Ministry of Finance is in charge of increasing charter capital to EVN.

Ngoc Le