KEPCO Decides to Proceed with Vietnam Bungang2 Coal Power Project... Environmental Groups Protest (Comprehensive)

[Asia Economy Reporter Kim Bo-kyung] Korea Electric Power Corporation (KEPCO) has decided to proceed with the Vietnam Bongang 2 coal power plant project as planned.

KEPCO announced on the 5th that the board of directors approved the investment agenda for the Vietnam Bongang 2 project. This project, commissioned by the Vietnam Ministry of Industry and Trade, involves constructing and operating a power plant with a capacity of 1,200 MW (two units of 600 MW each) in Ha Tinh Province, located 300 km south of Hanoi, Vietnam. The total project cost amounts to 2.2 billion USD (approximately 2.6 trillion KRW).

Initially, the project had equity participation of 40% each by Japan's Mitsubishi and Hong Kong's China Light and Power Company (CLP), with Japan's Chugoku Electric Power holding 20%.

However, after CLP decided to withdraw from the project, KEPCO agreed to purchase CLP's 40% stake following Mitsubishi's proposal, which had been leading the project. Samsung C&T and Doosan Heavy Industries are expected to participate as engineering, procurement, and construction (EPC) contractors.

With the board's approval, KEPCO plans to sign the project and financing contracts within this year, commence construction next year, and complete the plant by January 2025.

However, strong opposition from environmental groups is expected during the project implementation. There are many criticisms that exporting coal power plants overseas while promoting eco-friendly and renewable energy expansion policies is a 'contradiction.'

International environmental organization Greenpeace issued a press release immediately after KEPCO's board decision, stating, "This decision will exacerbate the climate crisis and cause economic losses to the country," and demanded, "Korea should withdraw from overseas coal power projects, including Bongang Unit 2."

Yang Yeon-ho, a Greenpeace campaigner, criticized, "The Korean government pledged to reduce greenhouse gas emissions by 173 million tons by 2030. Confirming the Bongang 2 project contradicts the government's announcement to solve the climate crisis through the Green New Deal," adding, "It is an act that pours cold water on the international community's efforts to address climate change even amid the COVID-19 pandemic."

European institutional investors have also expressed opposition. The UK's largest corporate pension fund manager Legal & General Group, Norway's pension company KLP, and Finland's Nordea Bank have demanded that Samsung C&T refrain from participating in the Bongang 2 project, citing concerns that it could cause "reputational risks and climate-related risks."

In response, KEPCO stated that it will build the power plant using ultra-supercritical pressure technology to minimize carbon emissions and install additional eco-friendly facilities to reduce greenhouse gas emissions to the minimum. KEPCO also emphasized profitability, saying, "We have signed a 25-year long-term power purchase agreement with Vietnam Electricity, enabling stable revenue generation."

However, KEPCO indicated that it will not actively pursue overseas coal-fired power investments in the future. Previously, the Ministry of Trade, Industry and Energy also announced, "In the future, public enterprises will consider supporting overseas coal exports only under significantly strengthened and strict conditions, including requests from counterpart countries and contributions to environmental improvements and related ecosystems."

This content was produced with the assistance of AI translation services.