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PETROVIETNAM POWER CORPORATION

PETROVIETNAM POWER CORPORATION


Project Description

OVERVIEW

PetroVietNam Power Corporation (PV Power) was established in 2007 under the Decision No.1468/QĐ-DKVN  issued by Vietnam Oil and Gas Group. The Corporation has its main business in generation, transmission, trading, import and export of electricity. The Corporation has been put into operation under the model of a joint stock company since July 2018. PV Power is managing and operating 08 power plants with a total capacity of 4,208.2 MW, including gas-fired, coal-fired and hydro power plants. Each year, PV Power supplies the national power grid approximately 21 billion Kwh, occupies 13-15% of the total national commerical electricity production, stands at the second position behind EVN. PV Power has been traded on the UPCOM market since March 2018.

MAIN BUSINESS

  • Generating, transmitting, distributing and trading electricity;

  • Controlling and operating network of power generation, transmission, distribution in national power system;

  • Importing and exporting electricity;

  • Investing and managing capital in its power projects;

  • Managing, operating, repairing, maitaining, upgrading electromechanical, automated equipment and machineries in systems of power generation, transmission, distribution and power works;

MARKET POSITION

  • PV Power is managing and operating 08 power plants with a total capacity of 4,208.2 MW, including gas-fired, coal-fired and hydro power plants. Each year, PV Power supplies the national power grid approximately 21 billion Kwh, occupies 13-15% of the total national commerical electricity production, stands at the second position behind EVN. All the power plants of PV Power are applied with advanced technologies and machineries provided by the world famous providers e.g. Siemens, GE/Alstom, Toshiba…

  • 64% capacity of PV Power is from gas-fired power plants whose investmetn unit cost is normally lower than coal-fire power plants. As a result, PV Power’s average investment unit cost is the lowest among 05 power generation corporations, including Genco 1, Genco 2, Genco 3 and TKV Power.

  • PV Power’s gas-fired power plants have depreciated mostly with a quick capital recovery, which enables  PV Power to pay parts of loans and reduce financial pressure in coming years.

GROWTH STRATEGY

  • Playing an active role in ensuring national energy security and meeting the power needs of the national economy;

  • Investing, updrading equipment and applying advanced technolgies to decrease power loss;

  • Investing and upgrading transmission and distribution networks to reduce power loss;

  • Promoting cooperation with qualified partners in manufacturing and supplying equipment, repair and maintenance services for power plants and grids, research and development on new technologies

PROSPECTIVE

  • The power demand still outruns the power supply in Vietnam. The growth of power consumption depends much on the growth rate of the economy. As the growth rate of GDP is forecasted to reach 6.7-7%/year in the period 2016-2020, there will be a rapid pace at 11.5% in the power consumption. In this period, the GDP growth results mainly from industrial and construction actitivies while these sectors occupy more than 50% of Vietnam’s power consumption. Besides, the rally of the economy leads to the increasing demand in household power consumption. Moreover, the power transmission network has been already upgraded and expanded at over 40%.

RISK

  • Risks of delay in implementation: Power plants are normally a large-scale works with huge investment. Investors have to face up with risks due to delay in progress of construction. These delays create difficulties for enterprises in capital recovery, especially works funded by bank loans.

  • Risk of exchange rate: A number of the power projects are funded in foreign currencies. Therefore, the fluctuation in exchange rate also impacts on the effectiveness of these project significantly.

  • Risk of interest rate: Power projects normally requires huge investment, especially hydropower ones. As power is a key economic sector, there are often incentive policies in loans for power projects. As a result, the percentage of loans over total capital is often relatively high. Such capital structure raise risks in fluctuation of interest rate.