Jun. 12 – India’s largest power company, Tata Power Co. Ltd., has beaten competitors to sign a US$1.8 billion contract to invest in a thermal power project in Vietnam’s Mekong Delta province. The thermal power plant, which will be called Long Phu 2, is the largest project in Vietnam that an Indian company has ever invested in. Construction is expected to begin in 2019.
“Tata Power has been awarded the Long Phu 2 project by the government of Vietnam based on pre-feasibility studies. The capacity is 1,200 megawatts as per the master plan. Tata Power is [now] pursuing further steps, including formalizing a memorandum of understanding,” noted a company report from Tata Power.
Long Phu 2 is one of three thermal power plants to be built in the Long Phu Power Complex. State-owned Vietnamese company PetroVietnam is the major investor behind Long Phu 1, which began construction in May 2010 and is scheduled to commence commercial operations in 2015.
The Tata Group is India’s largest and most renowned multinational company, with this move likely helping to boost India’s Look East policy. The Look East policy, which was adopted by India in the early 1990’s, marks the country’s attempt to develop stronger economic links with the fast-growing Southeast Asian economies. India has also recently increased their investment in Myanmar in addition to expressing interest in Indonesia and Singapore.
“Vietnam continues to be an attractive investment destination for Indian companies. As of December 2011, India has 62 investment projects with total registered capital of US$234 million. If investments by Indian companies from third countries are included as well, India has [a total of] 86 projects with [a] total investment capital of US$868 million,” read a statement recently released on India’s Ministry of External Affairs website.