Bloomberg News

Russia to Lend Vietnam $9 Billion for First Nuclear Plant

November 23, 2011

(Updates with plant capacity in fourth paragraph.)

Nov. 22 (Bloomberg) -- Russia agreed to lend Vietnam as much as $9 billion to fund the construction of the Southeast Asian nation’s first nuclear power plant as the countries deepen their economic ties.

“The total loan value will be between $8 billion and $9 billion, depending on prices of materials at the time we start construction,” Phan Minh Tuan, head of state-run Vietnam Electricity’s nuclear energy development department, said by telephone today. The lending period will be as long as 28 years, Tuan said, declining to disclose the interest rate.

Vietnam said last year it plans to build as many as 13 nuclear power stations with a capacity totaling 16,000 megawatts over the next two decades. The announcement attracted interest from atomic plant builders including Moscow-based Rosatom Corp. and China’s Guangdong Nuclear Power Group Co.

Construction of the 2,000-megawatt Ninh Thuan 1 plant is scheduled to start in 2014, Tuan said.

Russia will also fund the plant’s feasibility study, to be conducted by a group consisting of E4 Group OJSC, Energoproject Kiev Co. and EnergoProject Technology Co., the state utility known as EVN said in a statement on its website. The study will last as long as two years, according to Tuan.

Vietnam and Russia will also aim to boost two-way trade to $5 billion by 2015, according to a statement posted on the Vietnamese government’s website yesterday.

The Ninh Thuan 1 plant, to be built in the south of Vietnam, will comprise two advanced light water reactors, according to EVN’s statement. The utility plans to build another atomic plant with Japanese assistance, Tuan said.

Nuclear Cooperation

Japan Atomic Power Co. signed a 2 billion-yen ($26 million) contract to carry out an 18-month feasibility study for the Ninh Thuan 2 plant, EVN said Sept. 28.

Ninh Thuan 1 and 2 are expected to meet about 4.5 percent of the country’s electricity demand, Le Dinh Tien, Vietnam’s deputy minister of science and technology, said Aug. 15.

The government is trying to boost power generation to meet its goal of annual economic growth of as much as 7 percent in the 2011 to 2015 period. Electricity use may rise 15 percent this year, EVN said in January.

Vietnam said in August last year it’s pursuing an agreement with the U.S. on civilian nuclear technology and welcomed overseas assistance, potentially signaling greater access for American companies including General Electric Co. to compete for contracts with rivals from Russia, China, Japan and France.

Vietnamese President Truong Tan Sang agreed Nov. 7 to seek greater cooperation with South Korea on the development of a nuclear power plant using South Korean technology, according to a joint statement released after talks in Seoul with his counterpart President Lee Myung Bak.

--Nguyen Dieu Tu Uyen in Hanoi. Editors: Ryan Woo, K. Oanh Ha.

To contact reporter on this story: Nguyen Dieu Tu Uyen in Hanoi at uyen1@bloomberg.net

To contact the editors responsible for this story: Amit Prakash at aprakash1@bloomberg.net.


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