Dinh Quang Tri, EVN deputy general director (Source: VNA) Q: What is the role of EVN in the plan? Which solutions will the group have toimplement to achieve the plan’s set targets?
A: Vietnam’s electricity sector includes EVN and other State-owned economicgroups and corporations like the Vietnam National Oil and Gas Group(PetroVietnam), Vietnam National Coal and Minerals Group (Vinacomin), the Da RiverCorporation as well as other investors.
EVN plays the key role in power production and supply.
The PM has assigned the Ministry of Industry and Trade (MoIT) the task ofdirecting relevant agencies in implementing the plan. EVN will be responsiblefor restructuring businesses in the electricity sector.
EVN has 100 percent capital in three big power generation corporations andplants that play an extremely important role in the country’s socio-economicdevelopment and national security.
The group also owns 100 percent of the National Power Transmission Corporation,five other corporations that manage power distribution, trading and marketoperations.
Based on the five-year plan, we’ve come with a project to restructurebusinesses under EVN’s management. We have submitted the project to the MoITand the PM for approval.
EVN has drawn up specific restructuring plans for its member companies with theaim of enhancing transparency in the costing of power generation, transmission,distribution and trading. It also seeks to promote healthy competition amongunits participating in the power market.
The group will equitise the Power Generation Corporation 3 (GENCO 3) this yearand GENCO 1 and 2 in 2018.
We will also help power corporations separate power distribution costs andretail costs, towards increasing transparency in the pricing mechanism.
EVN will also transform the National Load Dispatch Centre (the System Operator)into a one-member limited company with an accounting mechanism independent ofthe group.
It will submit a plan for this to the MoIT and the PM in 2018 for approval.
We are working with the ministry in approving or submitting plans relating tobig power plants that are extremely important for socio-economic developmentand national defence.
We are also working on regulatory mechanisms for power corporations in thewholesale market.
In addition, we will restructure power distribution companies to compete on anequal footing with other businesses in the retail market, starting in 2021before officially launching (the competitive retail market) in 2023.
Q: What will be the role of GENCOs in attracting investment and directlyparticipating in the competitive power wholesale market after theirequitisation?
A: As the PM has approved, EVN will equitise the three GENCOs in two phases.
For the 2016-18 period, GENCOs will remain under EVN’s management, with thegroup holding at least 51 percent of their shares. In 2019-20, the group willconsider reducing its controlling stake in the GENCOs. The GENCOs will cease tobe EVN subsidiaries after two years of equitisation.
Currently, the GENCOs are having difficulties in investing in power projects.The group has submitted to the PM a restructuring plan for them, under whichthey can sell a part their equity in power generation companies to improvetheir financial capacity to ensure a debt to equity ratio of less than three asper the law.
This would help EVN and GENCOs ensure reciprocal capital for attractinginvestment into new power projects.
EVN has also suggested that the PM allows the GENCOs put up shares worth morethan half of their charter capital in their IPOs. If their shares are not soldout, EVN would continue to hold controlling stakes in these corporations anddivest later.
The GENCOs will continue to participate in tthe competitive wholesale powermarket after their equitisation.
Q: How will the five power corporations be structured as the power distributionand retail costs are separated?
A: According to Decision No 168, in the 2016-2020 period, all the five powercorporations – the Northern Power Corporation, the Central Power Corporation,the Southern Power Corporation, Hanoi Power Corporation and HCM CityCorporation – will remain one member limited companies in which EVN holds 100percent of the charter capital.
During this period, EVN will also continue holding 100 percent of the chartercapital in companies managing power grid distribution.
Firms engaged in retail trading of electricity will be equitised following thedevelopment of the power market.
As of now, the five corporations are managing both power distribution andretail trading.
According to the roadmap for developing the domestic power market, retailtrading will be separated from management of power grid distribution startingfrom 2021.
After that retail trading units will compete to each other and other privatecompanies to sell electricity to customers.-VNA
VNA
