Sumitomo to transfer 50 per cent of its equity interest in Van Phong Power Company Limited

Sumitomo to transfer 50 per cent of its equity interest in Van Phong Power Company Limited

Sumitomo Corporation announced on May 1 that it will transfer 50 per cent of its equity interest in Van Phong Power Co., Ltd. (VPCL), a wholly owned subsidiary.

Through VPCL, Sumitomohas been investing in Van Phong 1 Coal-Fired Power Plant in Vietnam. VPCL is classified as a specified subsidiary of Sumitomo. As a result of this decision, VPCL is expected to be reclassified from a consolidated subsidiary to an equity-method affiliate subject to satisfaction of certain customary closing conditions.

Sumitomo established VPCL in 2018, and VPCL commenced construction of the coal-fired power plant in 2019 and achieved commercial operations in 2024. The power generation business of VPCL plays a key role as an important base load to enrich lives and industries in Vietnam, where electricity demand continues to increase rapidly with economic growth.

Going forward, Sumitomo will continue to provide stable energy supply that is essential for the economic and industrial development of local communities, while shifting its resources towards power generation with lower environmental impacts.

Van Phong 1 Coal-Fired Power Plant is designed to supply about 8.5 billion kWh per year to the nationa grid, equivalent to 3 per cent of Vietnam's total capacity. This is the largest foreign-invested project in Khanh Hoa province.

The plant is invested in the form of build–operate–transfer model under a contract signed by the Ministry of Industry and Trade. The venture will be handed over to the government after 25 years of operation.

A consortium of its contractors includes IHI Corporation, Toshiba ESSC, CTCI Corporation, and Doosan Heavy Industries & Corporation.

Besides Van Phong 1, Sumitomo has also engaged in the Phu My 2.2 thermal power plant in Ba Ria-Vung Tau province, with a capacity of 715MW and a total investment of $400 million. It is the first undertaking awarded through an international tender fully funded by foreign investors, including France's EDF, Japan's JERA, and Sumitomo. On February 4, EVN took over the running of Phu My 2.2 after 20 years of operations.

VIR