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Ministries disagree about large waste to energy project

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While the Ministry of Industry and Trade (MOIT) supports waste-to-electricity project with huge investment capital of VND2 trillion, the Ministry of Finance (MOF) views it as problematic.

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MOIT has sent a document to the Prime Minister, proposing to add the Phu Tho WTE project to the national power development plan.

Phu Tho WTE Plant, 18 MW, is registered by Au Viet Natural Resources & the Environment JSC and United Expert Investment Ltd. The project, covering an area of 10 hectares, located in Tram Than commune of Phu Ninh district in Phu Tho province, has investment capital of VND2.242 trillion.

Nha Dau Tu cited an MOIT document as reporting that the investor has decided to choose energy-from-waste technology, using an automatic grate boiler. The choice is in line with the Phu Tho provincial authorities’ Decision No 2620 in October 2016 on waste treatment in the locality in the 2016-2020 period. 

It is expected that the plant would provide 95.9 million kwh per annum to the national grid.

MOIT believes this is an effective project with treatment cost of $16 per ton and treatment capacity of 365,000 tons of waste a year. 

The electricity selling price would be 10.06 UScent per kwh, NPV (net present value) $17.35 million, IRR (internal rate of return) 8.66 percent and B/C 1.1. 

Regarding the investors’ capability, MOIT said they are running a number of similar projects, including Lien Giang WTE 1,000 tons per day, Nhu Dong WTE 1,800 tons per day, Lieu Nguyen 1,200 tons and Tan Chau 1,200 tons. 

MOF still has a lot of questions about the projects. The report from the Phu Tho provincial authorities only showed the solid waste treatment capacity of the project, while there was no assessment and prediction about the volume of waste and the way to collect waste to ensure there is enough waste for the plant.

MOF also said it was unclear about the technology the plant will use because the investor did not explain why they chose the technology or its origin.

Regarding the financial capability for the project implementation, the investor estimates the total investment capital for two development phases at $98.7 million. It is expected that 80 percent of capital for the project will be from loans. 

Meanwhile, the investor’s financial capability remains questionable. Audited financial reports, capital arrangement agreements and capital contribution by members of the joint venture have not been submitted.

Since the capital mobilization plan (roughly VND1.793 trillion) remains unclear and there is no document showing commercial banks’ commitments to fund the project, MOF has reason to doubt the feasibility of the project.

 

 

Source: VietNamNet

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