Attracting FDI through quality and reliable power supply.

The Prime Minister has instructed the Ministry of Industry and Trade to guide the Vietnam Electricity Group (EVN) in shortening the time required to access electricity for projects supplying power to the Ho Chi Minh City High-Tech Park, in order to bring Samsung Group's projects into operation on schedule, ensuring quality and investment efficiency.

In the North, the first phase of the Samsung High-Tech Complex project has become operational, and the second phase, recently licensed for investment in Thai Nguyen with a total registered capital of over 3.2 billion USD, are projects expected to create momentum for a qualitative transformation of the Vietnamese economy in the coming years.

These projects also demonstrate that Vietnam continues to be an attractive and safe destination for foreign investors, especially large global electronics corporations. One of the key solutions that interests investors is the need for a stable power supply with guaranteed technical standards, particularly for high-tech projects.

Strategically located, Phase 1 of the Ho Chi Minh City High-Tech Park is now nearly 80% occupied with 40 operational projects; attracting many major investors such as Intel, JABIL, Nidec, Microsoft, Datalogic, FPT… with a total investment of US$4.1 billion. Samsung alone, with an investment of US$1.4 billion, began construction in early 2015 and is expected to start production in the first quarter of 2016. Besides Samsung, several other microchip manufacturers have been granted investment licenses and are preparing to launch operations in the park.

Product assembly takes place at the Samsung factory in Yen Phong Industrial Park, Bac Ninh.

Mr. Le Thanh Dai, Deputy Head of the Management Board of this High-Tech Park, said: The goal is not to fill the park but, more importantly, to select investors in key sectors to bring world-leading technologies into research and transfer to Vietnamese businesses. Regarding the electricity supply situation here, Mr. Dai stated that the High-Tech Park is a particularly demanding customer of the electricity sector because it always requires a high-quality and stable power supply. Among them, Samsung is a large and extremely important customer. Investors here are always concerned about whether the electricity supply is reliable.

Mr. Pham Quoc Bao, Deputy General Director of Ho Chi Minh City Power Corporation, also affirmed: The unique characteristic of electronics manufacturing is not the electricity output but the high technical standards, from voltage fluctuations on the power lines affecting the investor's production, exceeding the regulations from Circular 32 of the Ministry of Industry and Trade on operating standards and investment in the development of the distribution power grid. Intel is the most demanding customer because the electricity quality must strictly comply with their production requirements. Therefore, the Corporation has established a working group that meets monthly with Intel to quickly resolve the investor's electricity supply requests. Simultaneously, a 110kV substation will be built to bring electricity from Cat Lat to supply Intel and Samsung, ensuring the investor can produce with complete peace of mind.

“Besides the high-quality and stable power supply transmitted to the area, and the regular meetings between customers and the Ho Chi Minh City Power Corporation, we are completely confident in our commitment to investors regarding power supply. The power industry considers businesses as an important factor and also develops thanks to businesses; that is cause and effect,” Mr. Dai commented.

Established in 2007, the American company JABIL specializes in assembling electronic components such as magnetic card scanners, electronic clocks, and telecom system circuit boards, employing 2,500 workers in the industrial park. JABIL also has plans to expand its operations in Ho Chi Minh City and surrounding areas. Mr. Bui Tan Dat, Head of Maintenance at the company, assessed that the electricity supply from Thu Thiem Power Company (under the Ho Chi Minh City Power Corporation) is constantly improving due to proactive customer engagement and consultation to ensure stable power supply. With an average monthly electricity output of 1 million kWh, Mr. Dat hopes for a reliable power supply to maintain production for the company.

Currently, this High-Tech Park houses five Nidec companies, employing over 10,000 workers. Nidec Vietnam, in particular, specializes in manufacturing cooling fans for computers, DC motors, and exports all its products to Japan, Singapore, and Hong Kong. Regarding energy saving, Mr. Luu Kim Hong, Head of Maintenance at the company, stated: With an average monthly electricity consumption of 1.2 million kWh, electricity costs account for approximately 30% of the company's production costs. To contribute to cost reduction and increased competitiveness, the company has conducted energy audits, replaced its entire fluorescent lighting system, and researched and improved energy-saving equipment.

According to Mr. Vo Hong Minh Danh, Deputy Director of Thu Thiem Power Company, Phase 1 of the High-Tech Park is supplied with electricity from two 110kV substations, Tang Nhon Phu and Intel, each with a capacity of 126MVA. This fully meets the electricity needs of investors and is even "ample" with the backup power from the 110kV Thu Duc Dong substation, as the capacity used there is only 17MVA. For Phase 2, the current power capacity is basically sufficient to supply the entire park until 2020, but with an expected load demand of around 120-150MW, the reserve factor is not yet high enough.

Therefore, the Ho Chi Minh City Power Corporation is investing in a 220/110kV high-tech substation with a total capacity of 620MVA and connecting power lines, with a total investment of approximately 230 billion VND, to ensure electricity supply for investors in the High-Tech Park from the end of 2015. Simultaneously, they are investing in a mini SCADA (power grid automation) project to supply a portion of the park's electricity to enhance the reliability of power supply. Therefore, phase 2 of this High-Tech Park, and specifically for the Samsung factory, fully meets the backup power and electricity quality requirements for investors.

In Thai Nguyen, at the beginning of 2013, Samsung Electronics Vietnam committed to building a factory to manufacture electronic components with a total investment of over $1.2 billion. Prior to that, Samsung had already invested $2 billion to build a high-tech complex there. Thus, with a total investment of over $3.2 billion in Thai Nguyen, the Samsung Group's factory complex will play a significant role in the socio-economic development of Thai Nguyen province in particular and the northern mountainous region of Vietnam in general.

To meet the power supply needs of Samsung Electronics Vietnam and its satellite investors in Thai Nguyen, the Northern Power Corporation has invested nearly VND 837.3 billion in providing electricity to these important loads; of which 5 projects have been completed and energized, and one project will be energized in early 2015. At the same time, the Corporation is also urgently implementing the investment in two 110kV Yen Phong 2 and 3 substations and connecting power lines to meet the power supply needs of the Samsung Display Yen Phong High-Tech Complex (Bac Ninh) from June next year. These are key projects assigned by the Government to EVN to ensure safe, stable, and high-quality electricity supply for high-tech loads. Currently, the power supply capacity for Samsung in the northern region is fully met, according to Mr. Ho Manh Tuan, Deputy General Director of the Corporation.

Given the current situation, attracting FDI, especially in high-tech sectors, requires proactive investment in power generation and transmission. However, energy experts argue that investing hundreds of billions of dong in power generation upfront would be wasteful. Meanwhile, due to business confidentiality and competition among electronics companies, investors often don't disclose their electricity needs early. From the time they request it to the time the power sector must implement it, including project planning, investment procedures, construction, and installation, it happens very quickly, within just 3-4 months. This places significant time pressure on power sector units when investing in these crucial projects.

According to news