Government urges action on stalled Mekong Delta power projects

Government urges action on stalled Mekong Delta power projects

The government has asked ministries and agencies to resolve hurdles to the Song Hau 2 and O Mon 2 and 3 thermal power projects by the end of September.

O Mon 1 thermal power plant. Photo: baodautu.vn

The directive was issued by Standing Deputy Prime Minister Pham Gia Tuc on September 15 following a review of major transport and energy projects in the Mekong Delta. The work aims to strengthen energy security and expand power infrastructure in the region.

The 2,000 MW Song Hau 2 thermal power project in Hau Giang province, invested in by Malaysia's Toyo Ink Group Berhad, was licensed in 2013, with build-operate-transfer (BOT), power purchase, and land lease agreements signed at the end of 2020. In 2024, however, the Ministry of Industry and Trade (MoIT) terminated the BOT contract after the developer failed to finalise required financial arrangements. Construction has since stalled, with the former investor failing to continue implementation amid unresolved issues involving its deposit, project documentation, and related disputes.

Accordingly, the MoIT has been directed to work with relevant agencies to resolve disputes with the project investor while balancing stakeholder interests in line with Vietnam’s international commitments. The work must be completed in September. The ministry will then report to the prime minister on a proposal from state-owned Petrovietnam about the project, with a target of bringing the plant into operation by 2030.

Regarding O Mon 2, part of the Block B-O Mon gas-to-power chain in Can Tho city, the MoIT was asked to work with other ministries, Vietnam Electricity, Petrovietnam and the investor (a joint venture between Japan's Marubeni Corporation and Vietnam Trading Engineering Construction JSC) to resolve obstacles surrounding O Mon 2 and prevent prolonged negotiations over project agreements from affecting its schedule.

For O Mon 3, bidding for the engineering, procurement and construction contractor must be completed in late September as well, with related packages also launched to keep the overall project on schedule.

Along with O Mon 2 and 3, several projects in the Block B-O Mon gas-to-power chain also faced delays linked to electricity pricing, financing, power purchase agreements and commitments to take or pay for gas.

Petrovietnam was separately required to closely monitor upstream and midstream projects in the gas chain and shorten implementation times, with first gas from Block B targeted no later than the third quarter of 2027.

VIR