VietNamNet Bridge – The energy sector is not able to raise sufficient funds to invest infrastructure as well as new forms of energy because prices are not linked to production costs, industry insiders say.

They say a clear costing mechanism for power will attract investment for expanding power supply and help deal with the looming power shortage.

Deputy Minister of Industry and Trade Do Huu Hao was quoted by the Lao Dong (Labour) newspaper as saying attracting investors into power plant development was crucial for dealing with the power shortage in the future.

Investors wanted a mechanism for electricity prices that secured their investment he emphasised.

"To meet the constantly increasing demand for power, Electricity of Viet Nam (EVN) needs trillions of dong to reinvest in extending supply capacity and expanding the power grid," said Pham Le Thanh, EVN general director.

But power prices did not match production costs, so the sectors has attracted just two foreign investors so far for built-operate-transfer projects in Ba Ria-Vung Tau Province's Phu My No 2 and 3 power plants

Individual power producers paid less attention to developing alternate sources like solar, wind and biomass energy because of low power prices, Thanh said.

He said the EVN had contacted several international financial organisations like the World Bank, the Asian Development Bank as well as the Japanese Government, seeking funds for reinvestment.

VietNamNet/Viet Nam News