Vietnamese and Chinese power companies have just signed an electricity-supplying contract, following two similar deals last year, the Vietnamese side said on Thursday.

The Power Company No. 1 (PC1) under the Electricity of Vietnam on Wednesday signed the contract with the Yunnan Electric Power Group Co., Ltd. under the China Southern Power Grid.

Under the contract, the PC1 will buy the Chinese company's electricity via the 110-kv transmission line with a capacity of 50-70 mw and annual output of 180-200 million kwh to serve the two northern provinces of Ha Giang and Yen Bai.

Accordingly, the connection of electricity grids of the two sides will start in early July and end in late December 2006.

The PC1 signed its first contract with the Chinese partner in early April 2004, under which it imports electricity from China with a capacity of 40 mw and annual output of 180-200 million kwh to serve the northern province of Lao Cai.

In early December 2004, the PC1 inked a similar contract with another Chinese partner, under which the former purchase electricity from the Guangxi Electric Power Group Co. Ltd. under the China Southern Power Grid with a capacity of 25 mw and annual output of 100-130 million kwh to serve the northern province of Quang Ninh.

The power trade between Vietnam and China is part of a long-term power trade program between Vietnam and other members of the Greater Mekong Sub-region, PC1 Director Nguyen Phuc Vinh told Xinhua, noting that his company, while seeking foreign partners, pays special attention to Chinese power enterprises, especially those in Yunnan and Guangxi provinces.

"We will conduct negotiations to buy more electricity via the 220-kv transmission line from the China Southern Power Grid after 2006. At that time, national grids of Vietnam and China will be linked together," he said.

The Electricity of Vietnam, the country's biggest power producer, has warned there could be blackouts early April in many central provinces because of prolonged droughts. Since late 2004, water flows into reservoirs, which power hydroelectric plants, have been 20-40 percent lower than in previous years. The plants generate 35-40 percent of Vietnam's total annual electricity output, but this year's figure is estimated at only 30 percent.

Source: Xinhua