The question is that after government approval, how will the plan affect EVN's business and investments in 2009? Dang Hoang An, the group's deputy general director answered that the electricity price will be fixed by the Ministry and the government.

The proposed 10% rise in electricity price was calculated carefully to ensure capital source for power investment and development. The event, EVN's rejection of 13 power projects earlier, was also because of the capital shortage, he added.

EVN's capital demand for 2009 is estimated at about 50 trillion dong, therefore the group will have to look for more solutions to balance capital through selling shares of equitised power companies, carrying out equitisation for some entities and borrowing foreign loans.

This year EVN plans to complete construction of nine power plants with the total capacity of 2,996 MW. Though lacking capital, we EVN will still have to boost investments to put these nine plants into operation in 2009, said An.

Regarding capital supply to EVN, the prime minister reported to the National Assembly that the group will need 882 trillion dong from now to 2015. Based on this, EVN classified groups of projects to arrange capital structure suitably. The investment boosting plan of EVN in 2009 means that while short-term capital is there is not enough long-term capital.

Some people said that EVN could balance investment capital if there is cost saving and electricity losses are reduced. The deputy general director confirmed that EVN's 2008 revenue of over 57 trillion dong, a year-on-year growth of over 13% was due to cost saving. The group has dealt with 761 billion dong worth of stockpiled material and equipment, 132 billion dong of non-performing debts and 235 billion dong of cost saving.

However, the above figures are too small compared with a needed investment capital of trillions of dong for one power plant.

Therefore it is unrealistic to say that saved costs are enough to build a new power plant.

2008 was the first year EVN succeeded in bringing the electricity loss (technical errors, loss in transmission process) to one-digit, 9.35%. EVN had to cut power many times because the group only could buy 21.08 billion kWh out of the planned 24.11 billion kWh (last year EVN provided 74 billion kWh from the total targeted 77.2 billion kWh), he reported.

In 2009, EVN's power production and purchase is targeted at about 83.6 kWh, including 25.5 billion kWh set for purchase from external supply, up over 1 billion kWh against 2008.

Thoi Bao Kinh Te Vietnam - January 23, 2009