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Airfares to increase sharply on April 30, May 1

April 10, 2021 by sggpnews.org.vn

Particularly, flight ticket prices to popular tourist destinations such as Da Nang, Quy Nhon, Da Lat and Phu Quoc have highly surged.

As for Hanoi- Quy Nhon route, one-way air ticket prices in the mornings are from VND2.7 million (US$117) to VND3.2 million (US$139); meanwhile, the one-way flight tickets in the afternoons are priced lower, around VND2 million (US$87), being 2-10 times higher than the days before and after the holiday.

To meet the travel demand of passengers, Vietnam Airlines, Pacific Airlines and Vietnam Air Services Company (Vasco) planned an increase of nearly 500,000 seats on their flights in six peak days from April 28 to May 3.

Vietjet and Bamboo also increase flights by up to 12 percent-15 percent for the upcoming holiday.

By Bich Quyen- Translated by Huyen Huong

Arduous path to LNG success

April 6, 2021 by www.vir.com.vn

GE’s latest 9HA.02 turbine is accelerating the shift to LNG

After a wave of investment in solar and wind power over the past two years, Vietnam is now witnessing strong interest in the field of electricity generated with the use of liquefied natural gas (LNG).

A report by the Institute for Energy Economics and Financial Analysis (IEEFA) published in January stated that Vietnam has quickly become one of the most promising LNG import markets in Asia, and many domestic and international investors have expressed their desire to pursue projects in the country. They are encouraged by changes in government management that no longer sees coal-fired thermal power as the centre of the power system, as well as the rapid growth of renewable energy in the nation’s power structure.

As such, investors have actively portrayed LNG as a cleaner source to replace coal and argue that gas-fired power units will be one of the main power sources required to feed public demand and supplement unstable renewable sources.

The IEEFA report also stated, “Vietnam’s electricity industry has never seen a wave of investors expressing so much interest as they do now, that – with the accompanying diplomatic pressure – remains unprecedented in the country’s history.”

Interest in LNG power may also be related to Resolution No.55/NQ-BCT on the orientation of Vietnam’s National Power Development Plan (PDP8), which emphasises the rapid development of LNG thermal power plants. However, at the same time, experts advise that priority must be given to developing LNG import and distribution infrastructures.

According to the nation’s target until 2030, Vietnam must import 8 billion cubic metres of LNG per year, while the current rate is zero. The focus on LNG power generation is also attributed to its advantages, such as ensuring a stable power supply and minimising the impacts on the environment.

“The third draft of the PDP8 for the period 2021-2030, with a vision to 2045, is proposing to quadruple the current capacity of gas-fired thermal power by 2030 to 28GW, equivalent to 21 per cent of the total system capacity. Most of these plants are then expected to use imported LNG,” the IEEFA report states.

According to experts, LNG power generation is flexible and can be adjusted as needed. Besides this, the carbon emissions of LNG account for roughly half of coal power, which helps to reduce the energy sector’s impact on the environment. At the same time, LNG power is capable of reaching higher power output when needed, without interruptions and dependencies on nature such as wind or solar power.

Given the fact that global CO ₂ emissions are still increasing, the power sector takes on a mandate and a multidimensional approach to take important steps to rapidly reduce greenhouse gas emissions and solving the problem of climate change on a large scale.

“Despite the massive deployment of renewables such as wind and solar power, the energy sector has not improved significantly to meet the goals set out in the Paris Agreement on carbon neutralisation. The International Energy Agency (IEA) said that to achieve improvements in power efficiency, instead of spending time building new renewable power sources, it is possible to convert from coal to gas to reduce emissions faster,” said Vic Abate, General Electric’s (GE) senior vice president and chief technology officer and former CEO of both GE’s Gas Power and Renewables businesses.

According to the current draft of the PDP8, there are about 24 LNG projects proposed with a total potential of 23GW by 2025 and 84GW by 2035, with a demand for imported LNG of about 60 million tonnes per year.

Challenging negotiations

According to experts, about half of the proposed gas power projects are complexes for LNG import ports, storage tanks, recycling systems, and gas pipelines and power plants, with the remainder being pure power plants running on LNG.

However, no LNG power project has started its construction yet because contracts related to their operation have not been completed, most notably because of the missing power purchase agreements (PPA).

Even though the Bac Lieu LNG project was licensed in early 2020, the project owners are still negotiating a PPA without seeing the finish line anywhere close.

Talking about the progress of LNG project implementation, experts from the energy sector, as well as several project brokers and financial advisors, also said that the biggest challenge will be to negotiate the PPA.

“PPA negotiations must comply with the regulations of the Ministry of Industry and Trade, whereby the approved project documents must be available before the negotiation. Based on investment costs, cash flow in and out, profits, and discount rates, the purchase price of electricity that investors want to sell will be set. Except for those cases that do not exceed 7 US cent per kWh, for which Electricity of Vietnam will sign a PPA immediately, other prices will take computation and consideration,” said energy consultant Nguyen Binh.

Other investors also said that since the government reaffirmed that there are no guarantees, the decision to invest in an independent power plant requires investors to make great efforts.

“Spending a few billion US dollars on projects without a foreign currency conversion guarantee will make it difficult for investors to keep cash flows in hand when unexpected situations occur,” said Binh.

Track 4A power plant in Malaysia running on GE’s latest generation of HA turbines

Scale is king

According to Petrovietnam, the 24 planned LNG power projects recorded in the draft PDP8 will lead to a situation where the coastline of Vietnam will be covered by the configuration of “one power plant plus one LNG import and gas refinery warehouse”.

Meanwhile, other countries around the world are developing power plant clusters using large receiving ports to optimise the cost of gas infrastructure between the port and the power plants.

This means that these power centres choose a place with favourable conditions for convenient infrastructure with low cost, located near a suitable load centre and built according to environmental criteria. For instance, port warehouses must have a capacity of at least 6 million tonnes of LNG per year to be considered cost-efficient.

In parallel with the recommendations on the size of LNG terminals, experts also said that using new and innovative technologies will bring higher efficiency to an LNG power plant.

In the technology race, GE’s two world records for operating power plants with the highest efficiency have sparked the interest of LNG project operators in Vietnam as they offer significant cost savings compared to other technologies in the industry.

“The newest generation of turbines offers the lowest cost of capital and fuel conversion with a long engine life, thus reducing the total cost of ownership. As such, a generation H turbine combined with cycle plant for 1,000MW occupies an area of about 0.05 square kilometres, far less than the 20sq.km needed for onshore wind or solar power plants of the same scale,” said Christophe DuFault, general manager (Project Execution) of GE Gas Power Asia, adding that GE’s HA turbines are currently the largest and most efficient gas turbines in the world and have received more than 120 orders from more than 48 customers in 20 countries and regions.

With its strong development potential, the IEA expects the Asia-Pacific to be a region with many “breakthroughs in the development of LNG power plants in the next decade”.

GE has more than 80 years of experience in the supply and construction of combined cycle power plants, and it has been 29 years since the first H turbine generation. GE’s H-generation turbines currently supply 21.5GW at 24 locations worldwide and are monitored daily at its centre in Kuala Lumpur.

In addition to delivering outstanding energy efficiency and cost savings, GE’s newest H-generation turbines also cut emissions – a key factor in securing the future of the energy industry in Asia-Pacific.

However, experts also say that although LNG can be a superior solution to other fossil fuels in terms of efficiency and emissions, both these advantages depend heavily on related technology.

“Our new power plant operating in Malaysia demonstrates that low-carbon or non-carbon gas power technologies, such as our HA technology, can help accelerate CO ₂ reductions in power production. At GE, the combination of gas and renewable electricity will be part of the solution for the present and the future,” said DuFault.

LNG is now expected to lead the way in Vietnam’s energy structure, meeting a large portion of its capacity by 2030.

By Thanh Huong

Mekong Delta long-term future relying on renewables

April 10, 2021 by dtinews.vn

The latest draft of the country’s power development plan puts focus on renewable energy development – however, the Mekong Delta should see more attention in the development of renewables to protect its assets in the long run.

Mekong Delta long-term future relying on renewables, illustration photo

The latest draft of the National Power Development Plan 8 (PDP8) calculates with an expected commercial power capacity estimated at 491 billion kWh by 2030, and 877 billion kWh by 2045. To develop power capacity, the total installed power generation is planned to hit 137.2GW, contributed by 27 per cent coal-fired power, 21 per cent thermal gas, 18 per cent hydropower, and 29 per cent renewable energies, as well as 4 per cent imported energy by 2030.

By 2045, the capacity of installed power is planned to be around 276.7GW, supplied by 18 per cent coal thermal power, 24 per cent thermal gas, 9 per cent hydropower, and 44 per cent of renewable energies, as well as 2 per cent of imported energy.

“The PDP8 highlights the evolvement of renewables, in addition to hydropower, with a significant increase from 13 per cent in 2020 to nearly 30 per cent in 2030 and 44 per cent in 2045, while most other sources will be reduced,” said Le Anh Tuan, deputy director of Can Tho University’s Research Institute for Climate Change.

In the view of Tuan, the draft PDP8 is different in many ways to its predecessor, removing 5,000MW of coal thermal power and significantly raising the contribution ratio of renewable energies. However, Tuan also raised some issues like capital sources, the suitability of green finance solutions, and banking that are all also mentioned in the Politburo’s Resolution No.55-NQ/TW dated October 2, 2020 on the orientation of Vietnam’s National Energy Development Strategy until 2030 and outlook to 2045. It will be tough for coal power projects to mobilise capital in the future, because numerous global financial institutions are divesting from this sector.

Tuan also assessed that the draft PDP8 is more focused on environmental troubles and sustainable development. However, the plan still relies heavily on an old thinking focusing on coal-fired power, with new projects mainly expected to use imported coal.

Under the plan, three coal thermal power plants will be developed in the Mekong River Delta. A project in Hau Giang province and two in Soc Trang province are expected to generate around 5,000MW, which will significantly impact the environment of the region – one that is crucial for rice cultivation and aquaculture.

“Why don’t we focus on other energies that can replace coal? Vietnam is a promising land for wind and solar energy. We can even export power instead of importing from Laos and China as mentioned in the PDP8’s draft,” Tuan argued.

He explained that developing coal-fired power plants in this region stands in contrast to Resolution No.120/NQ-CP issued in 2017 on sustainable and climate-resilient development of the delta. “In this region, in addition to solar and wind power, biomass at small scale is quite suitable to develop, which would help the use of eco-friendly technologies and the reliance on coal thermal power,” Tuan suggested.

Tran Huu Hiep, former director of the Economics Department of the National Steering Committee for the Southwest Region, noted the role of the competitive power market and asked to remove the monopoly in this sector. “Developing coal thermal power is risky. Raising dependence on imported fuel like coal and gas will also bring risks for national energy security,” said Hiep. “Meanwhile, we have yet to make use of renewable energy potentials, and capital for this energy will be from many sources, including local and foreign investors.”

Hiep added that while the PDP8 should consider developing coal thermal power projects, especially in the next 10 years, there should also be a stronger focus on renewables like solar, wind, and biomass in the Mekong Delta.

Nguyen Ngoc Huy, senior consultant at Oxfam Vietnam, said that developing renewable energy in this region would pay attention to its characteristics. “Around 75 per cent of the region’s total power output serves aquaculture, while the remainder is spent for factories and consumption. Therefore, developing renewables in the delta will offer doubled benefits for both the energy sector and the region’s aquaculture and husbandry,” Huy said.

US$23 mln to be invested into Song Doc Industrial Park

April 9, 2021 by sggpnews.org.vn

According to the People’s Committee of Ca Mau Province, the Vietnamese Prime Minister signed a decision on investment policy for infrastructure business project of the Southern Song Doc Industrial Park in Phong Dien Commune, Tran Van Thoi District, Ca Mau Province with an area of 100 hectares.

The project implementation schedule must not exceed 36 months from the date of handing over the land.

US$23 mln to be invested into Song Doc Industrial Park ảnh 1

(Illustrative photo: SGGP/Hoang Hung)

The Prime Minister required the investor to implement the project only after the Ministry of Natural Resources and Environment approves reports about environmental impact assessment.

By Tan Thai- Translated by Huyen Huong

Digitising long-distance transportation in Vietnam

April 10, 2021 by www.vir.com.vn

An Vui – smart transportation management software solution

The Ministry of Information and Communications (MIC) on April 9 introducedAn Vui, a smart transportation management software solution, making it the first digital platform of the Vietnam Digital Technology Forum.

The forum is the continuation of the activities to introduce “Make in Vietnam” digital products and platforms launched in 2020 to implement the prime minister’s recently-approved National Digital Transformation Programme by 2025 with a vision to 2030.

Vietnam’s long-distance passenger transport market remains fragmented and fiercely competitive, and reluctant to change. The market is dominated by 2,000 large-scale businesses, accounting for 90 per cent of the market, while the rest are small-scale household operators.

ietnam Digital Technology Forum

Phan Ba Manh, director of An Vui Technology JSC, said the software solution aims to digitise the long-distance transportation industry, helping operators manage their businesses more efficiently. The An Vui software solution includes backend management tools for ticket sales, parcel shipments, and fuel usage management.

Addressing the event, Deputy Minister of Information and Communications Nguyen Huy Dung said that the An Vui software solution facilitates workers and students working and studying away from home in buying tickets. It is also a solution to meet the transport demand of firms and passengers.

Interbuslines, one of the famous passenger car operators on Hanoi-Sapa-Hanoi, is one of the first customers of An Vui. Only six months after operating on the An Vui platform, the profit of Interbuslines rose by 300 per cent.

Thus far, more than 1,000 bus operators use An Vui’s services and products. In 2019, Vietnam-based venture capital (VC) firm VinaCapital Ventures made an investment into An Vui for an undisclosed sum.

By Bich Thuy

Corporate bond rush heads for slowdown

April 10, 2021 by vietnamnet.vn

With Vietnamese regulators’ efforts to minimise the risks of corporate bonds’ mass issuance, the landscape is predicted to be cooled down compared to a frenzy of debt instruments in the previous period.

Corporate bond rush heads for slowdown.

According to fresh data from the Hanoi Stock Exchange, as of January 22, there were seven successful corporate bond private placements with a total value of $279 million and two public offerings of $70 million. The real estate sector accounted for $233.7 million, equivalent to 66.9 per cent of the total issued value.

Previously, over $17.82 billion of corporate bonds were issued last year, which increased by 38.5 per cent from end-2019 and 83.5 per cent from end-2018.

Albeit a decline in the last quarter of 2020’s issuance volume the real estate sector witnessed the largest corporate bond issuance volume in 2020 of over $6.09 billion, accounting for over 35 per cent of total issuance value at an average coupon rate of 10.52 per cent. The banking sector also made up for nearly 30 per cent, with an average coupon rate of 6.69 per cent, lower than 7.06 per cent in 2019. Some significant bond issuers included BIDV, VietinBank, HDBank, and TPBank.

The rush of corporate bond issuance has sought attention from yield-hunt investors in the face of ultra-low interest rates.

“Rising medium- and long-term capital demands to satisfy stricter regulations on credit safety limits and capital adequacy ratio in 2021 were putting much pressure on commercial banks to raise funds from bond issuance in late 2020,” explained Nguyen Tu Anh, director of the General Economic Department under the Central Party’s Economic Commission. “On the other hand, foreign investors have been closely engaged in the domestic debt market. In 2020, foreign investors were actively net buyers, expect only three months of slight net-selling, with a total net buying value of $179.7 million.”

However, the lack of transparency and independent credit rating agency makes the task of re-evaluating the debts much harder. According to Nguyen Hoang Duong, deputy director of the Banking and Finance Department under the Ministry of Finance (MoF), Decree No.153/2020/ND-CP dated December 31 on private offering and trading of corporate bonds in the domestic and international markets, stipulates that investors are responsible for their own investment decisions and risks.

As per Decree 153, corporate bonds for private offering shall be traded among professional securities investors only, except for cases of implementing judgment or decision of courts that have taken legal effect.

“The state cannot guarantee that issuers would fully pay interests and principal loans on time. Therefore, investors should be extra cautious of the legal framework, as well as dig deep into the full information of bonds they want to purchase. They would have to take responsibility for their own investment decisions and be willing to take risks when buying private bonds,” Duong said.

The MoF also cautioned investors to keep an eye on corporate bonds issued by companies that are members, subsidiaries, or affiliated firms of large corporations.

“Investors must pay close attention on the detailed information about stakeholders and organisational structure of the issuers. It is imperative to have a clear understanding of the companies’ financial health, their business activities, future outlook, and debt obligations. Specifically, do not just follow their parent companies’ reputation,” the MoF noted.

Bao Viet Securities Company added, “We believe that the demand for corporate bond issuance of domestic firms will also decrease, and insolvency risk may occur in a number of businesses in 2021. However, we believe that this risk is unlikely to spread and negatively affect the financial system.”

Nguyen Tu Anh of the General Economic Department cautioned, “Despite its rapid development in recent years, there are still several shortcomings hindering the industry. The scale of the Vietnamese corporate bond market still pales in comparison with regional peers. Furthermore, the secondary market has not been developed yet, and liquidity of corporate bonds after issuance is relatively low. An independent rating agency is still the major absent element.”

On a regional level, an improving global economic outlook and progress on pandemic vaccinations have pushed up bond yields in the emerging East Asia, including Vietnam. According to the Asian Development Bank (ADB), steady expansion in both the government and corporate bond segments supported the growth.

Specifically, government bonds grew 7.1 per cent from the previous quarter to $58.8 billion at the end of December, accounting for 82.8 per cent of the country’s total bond stock. Meanwhile, corporate bonds also sustained their growth momentum, increasing 13.6 per cent from the previous quarter and 169.5 per cent from a year earlier to $12.2 billion.

“Bond markets in emerging East Asia continued to grow, mobilising funding for the region’s sustainable recovery from the pandemic,” said ADB chief economist Yasuyuki Sawada. “Successful vaccination campaigns, accommodative monetary policy stances, and easing of restrictions are spurring on economic activity and shifting the recovery into higher gear.”

VIR