A BOOM IN THE CONSTRUCTION of 70 small and medium scale hydro projects now under construction in Vietnam has demonstrated that these projects are appealing to investors, the Ministry of Industry has said.
The Ministry has attributed the boom to the nod it gave to independent investment and management of power projects a year and a half ago and Vietnam’s large potential for hydro power production. It said a feasibility study for a small and medium hydro-power project costs an investor just US$63,111 and a period between six and 12 months. Ground-clearing efforts have also proved much simpler than those related to industrial parks, and affordable by a large number of businesses.
An investor in a hydro power plant has to invest just 2 cents to generate 1kWh of electricity but earns 5 cents for it. A business therefore may retrieve its initial investment in eight years, a recent survey showed.
The survey showed that production in the years to come still remains short to meet national demand for power which calls for an additional 1000MW a year. Therefore, all hydro plants have a guaranteed market for the electricity they produce with Electricity of Viet Nam, the sole power distributor in the country.
A small hydro project with an annual capacity of between 10 and 20MW can sign a contract for 25 years.