Viet Nam’s gross domestic product (GDP) had grown at an average of 7.5% per annum over 1996–2006 and reached 8.2% in 2006. Building on this remarkable performance, the government was determined to maintain a high economic growth of 8.0%–8.5% in 2006–2010 to reduce poverty to 11%–15% by 2010. As reliable power supply was essential to achieving this objective, it sought assistance from development partners, including the Asian Development Bank (ADB), to increase thermal power generation capacity to address the country’s dangerously low energy reserves during the annual dry season due to overdependence on hydropower.
In response, ADB approved in September 2007 a multitranche financing facility (MFF), comprising two loans with an aggregate amount of $930.71 million, for the Mong Duong 1 Thermal Power Project. The project was to construct 1 of 2 coal−fired power plants in a power complex to be developed in the coastal province of Mong Duong in northern Viet Nam. It was formulated by Electricity Viet Nam (EVN) and identified as a priority project under the sixth Power Development Plan 2006–2015.
Through the 1,000-megawatt (MW) Mong Duong 1 thermal power plant (MD1TPP), the project aimed to help (i) provide adequate and reliable power supply to meet the country’s electricity demand, projected to grow by 16% annually during 2006−2011 and by 11% in 2011−2015; and (ii) create a diversified power generation fuel mix. Its intended outcome was access to reliable and stable power supply of households and industries in northern Viet Nam.
Besides MD1TPP, outputs also included (i) common facilities for shared use with Mong Duong 2 thermal power plant (MD2TPP) then being developed by a private investor under a build-operate-transfer arrangement; and (ii) institutional and technical capacity building, particularly on circulating fluidized bed (CFB) boiler technology and plant operation. These outputs were delivered under the second loan or tranche 2 of the MFF.
Preconstruction works ─ including site clearing and leveling, river diversion, and provisions for power, water supply, housing, and office facilities in the construction site ─ and consulting services to update technical designs and drawings, prepare the environmental management and resettlement plans, and assist the EVN in procuring the Engineering, Procurement, and Construction (EPC) contract for MD1TPP were also covered by the project, under tranche 1.
Unit 1, with 540 MW, was tested and commissioned in October 2015. Unit 2, with another 540 MW, was tested and commissioned in December 2015. Between its commissioning and December 2017, MD1TPP generated 9,500 gigawatt-hours of electricity. All the common facilities ─ freshwater supply system, cooling water discharge canal, and access roads ─ and ash pond were constructed satisfactorily. In parallel, EVN constructed a 500-kilovolt transmission line to evacuate power from the complex.
Additional power from MD1TPP helped address the imbalance between hydro and thermal power generation and prevent load shedding to industrial, commercial, household, and rural consumers. The country’s reserve margin subsequently reached 20% in 2015. Power outages, which used to last 8 hours a day during the dry season, no longer occurred since after the plant was operated. With low operation cost and good control over future fuel costs because of its use of domestic coal, the plant is expected to benefit the country’s economic growth on a long-term and sustainable basis. By using CFB to reduce the sulfur content in emissions, MD1TPP has also demonstrated an innovative technology for making coal combustion less harmful to the environment.
EVN was the project executing agency. The Thermal Power Management Board 1 under EVN was the implementing agency.
