Vietnam Coal Power Project Moving Forward After Phase-Out Deal

(Bloomberg) -- Plans to build a long-delayed coal power plant in Vietnam are moving forward 18 months after the country agreed to a multibillion dollar deal to move away from the fossil fuel. 

The Song Hau 2 thermal power plant has signed a grid connection agreement with Vietnam’s main utility and secured a $980 million loan to purchase equipment, developer Toyo Ventures Holdings Berhad said in exchange filings on the Bursa Malaysia earlier this month. The $2.7 billion coal-powered project, which has been in development for more than a decade, would generate 2.1 gigawatts of power in the southern province of Hau Giang.

Vietnamese authorities and Toyo Ventures officials didn’t immediately respond to a request for comment. 

The project is progressing more than a year after Vietnamese officials signed a $15 billion climate finance package with rich nations to help speed its transition away from coal, the most-polluting fossil fuel. If the plant is built, it could put Vietnam in breach of that agreement, according to climate advocacy group Energy Shift Institute.

As part of the deal, known as a “Just Energy Transition Partnership,” Vietnam promised to keep its headline coal generation capacity at 30.2 gigawatts by 2030, about 7 gigawatts less than what it had previously planned. Given the nation’s current coal fleet and what’s already under construction, Song Hau 2 could push the country over that limit, said Christina Ng, managing director of Energy Shift Institute. 

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