Vietnam to Sell 35 per cent Shares of Hydropower Plant to Public

3:26:30 PM | 7/8/2005

Vietnam to Sell 35 per cent Shares of Hydropower Plant to Public

The State-run Electricity of Vietnam (EVN) plans to publicly auction a 35 per cent stake of Vinh Son - Song Hinh Hydropower Joint Stock Company (VSHPC) to raise funds for investing in new power projects in Vietnam.

The State currently owns 100 per cent of the unlisted VSHPC, which has registered capital of VND1,254 billion (US$79.9 million), according to the Vietnam Association of Financial Investors (VAFI)

In details, EVN will auction 43.75 million VSHPC shares at reserve price of VND10,200 each (compared with their face value of VND10,000). The bidding time was, however, not announced.

Meanwhile, 6,085,100 shares or a 5 per cent stake will be sold to VSHPC's staff at face value of VND10,000 each and 164,900 shares will be sold to the staff at preference price of VND7,000.

According to EVN general director Dao Van Hung, the corporation has initially chosen hydropower plants for equitisation (Vietnam’s term for privatisation) because the production costs in this field are lower than thermal, coal-fired and gas-fueled plants and the operation of hydropower plants will be more efficient in the near future.

The Vinh Son – Song Hinh Hydroelectric Plant now has an annual capacity of 598 million kWh and is running well and is capable of making profits.

VSHPC has total assets worth VND2.12 trillion (US$135 million). It targets to earn net profits of VND166 billion (US$10.6 million) in 2005, VND169 billion (US$10.8 million) in 2006 and VND175.9 billion (US$11.2 million) in 2007.

Vietnam needs to build and put into operation 10 power plants with a combined capacity of 3,023 MW in 2005, and 52 plants with a total capacity of 10,197 MW between 2006 and 2010. Total required investment stands at about US$22.5 billion.

Domestic demand for power in Vietnam is expected to be higher than the figure initially predicted by EVN, at around 48.5-53 billion kWh in 2005 and 88-93 billion kWh in 2010.