The Ministry of Finance and the Ministry of Industry and Trade have not reached a consensus on separating electricity transmission from EVN

Ministries of Finance and Industry-Trade Fail to Reach Consensus on Separating Electricity Transmission from EVN

The Ministry of Finance and the Ministry of Industry and Trade have not reached consensus on the plan to reduce state ownership stakes in power generation corporations, reorganize hydropower plants, and separate the electricity transmission unit from EVN.

In a proposal submitted on October 2, the Ministry of Finance proposed that the Government approve the restructuring plan for Vietnam Electricity Group (EVN) in line with the competitive electricity market. However, the two agencies still hold different views on several matters related to ownership structure, management models for power plants, and transmission operations organization.

Regarding the organization of the National Power Transmission Corporation (EVNNPT), the Ministry of Industry and Trade proposed separating it from EVN and transferring it to the relevant sectoral management ministry. The agency argued that separating the transmission unit would ensure independence between transmission and electricity generation and trading activities, thereby facilitating the development of a competitive market. This would also serve as a tool for the ministry to fulfill its energy security responsibilities amid forecasts of considerable difficulties in electricity supply in the coming period.

However, the Ministry of Finance proposed maintaining EVNNPT as a single-member limited liability company wholly owned by EVN in the interim.

According to this agency, EVNNPT currently serves as a transmission service provider responsible for investing in, managing, and operating the national transmission system. Separating it from EVN should be considered in relation to capital mobilization capabilities, implementation of transmission projects, financial obligations, and ongoing contracts.

By 2030, the transmission corporation requires approximately 45,000 billion VND annually for grid investment, but the company's financing capacity can only cover about 40%. To ensure financial viability and capital safety, EVNNPT needs an additional 42,500 billion VND in equity. The state budget would have to provide additional charter capital and guarantee loans, increasing the government's fiscal burden and debt.

The Ministry of Finance also expressed concern that separation would affect the coherence of investment in integrated transmission and distribution grids. This would impact the timeliness and appropriateness of developing renewable energy sources and local demand. Fragmented transmission grid management could face risks during emergency situations.

They also noted that electricity system dispatch operations and electricity market operations have already been separated from EVN, assigned to the National Power System and Electricity Market Operator Company (NSMO) under the Ministry of Industry and Trade. Meanwhile, transmission operations currently follow separate regulations that still ensure independence and transparency.

The agency proposed maintaining the EVNNPT model under EVN in the interim. Simultaneously, operators should research solutions to overcome difficulties so the unit can fulfill its responsibilities for investing in and developing the power grid according to the adjusted Power Development Plan VIII.

According to EVN's report, transmission units under state-owned electricity companies are also common practice in many countries to optimize and unify grid operations and investment. Several countries currently implementing this include France, Singapore, South Korea, Japan, and Malaysia, among others.

Electricity workers inspecting the system. Photo: EVN

The two agencies also have differing views on hydropower plants. In the draft proposal, the Ministry of Finance proposed that EVN continue to directly hold stakes in the current 7 hydropower companies, including Son La, Hoa Binh, Tuyen Quang, Ialy, Tri An, Se San Hydropower Development, and Hua Quang - Ban Chat.

According to the Ministry of Finance, hydropower plants have low generation costs, operate flexibly, and perform important functions such as flood control, irrigation, and waterway transportation. During the recent period, these plants have helped EVN balance costs when purchasing electricity from other higher-priced sources (BOT, imports, renewables), fulfilling public interest duties. They also serve as collateral for EVN to borrow funds for new projects.

However, the Ministry of Industry and Trade wants to establish a National Strategic Power Generation Corporation to operate and expand multi-purpose hydropower plants. This aims to centralize management of strategic power sources under one entity and ensure cost transparency.

Additionally, the two sides have also not reached consensus on several matters related to proposals to maintain 100% ownership stakes in various electricity and power generation corporations, and restructuring some directly affiliated thermal power plants such as Thai Binh, Vinh Tan 4, Quang Trach, Bac Ai, and Dong Duong.

According to the draft proposal, EVN aims to become a strong state-owned economic group with modern governance capabilities, playing a core role in ensuring national energy security. The group strives to increase revenue and profits by over 10% annually during the 2026-2030 period, with total investment capital of approximately 830,000 billion VND.

The Ministry of Finance stated that it has addressed the comments from the Ministry of Industry and Trade and relevant agencies. Due to matters requiring input from authorized authorities, the agency submitted the proposal to the Government Party Committee for review and feedback before completing the approval procedures.

Phuong Dung