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Japan and Vietnam are likely to sign a nuclear pact in Hanoi next week. The bilateral agreement will pave the way for Toshiba Corp. and Mitsubishi Heavy Industriesto win a contract to build Vietnam's first nuclear plant.
Officials of the two countries will meet in Hanoi next Wednesday to negotiate the terms of an accord on nuclear cooperation in 2010. Both governments appear to have agreed on the outlines and are now set to work out the details, the Nikkei Evening News said Thursday, citing government sources from both sides.
The Hanoi government announced earlier this year that it would start building two nuclear power plants, each with two 1,000-megawatt reactors, around 2013-15. The two plants are expected to begin power generation by 2020 to help relieve the country's severe electricity shortage. Vietnam's fast-growing economy has resulted in a power deficit that is estimated to hit 64 billion kilowatt hours in 2020; without measures to address the problem, according to domestic media sources, a further widening of the supply gap to 120 billion kWh will take place by 2030 amid rapid industrialization.
A nuclear cooperation pact between Japan and Vietnam would simplify customs procedures and facilitate Japanese companies' exporting nuclear plant parts or fuel to Vietnam. At the same time, it would prohibit Vietnam from using the nuclear-related equipment for military purposes or transferring it to a third country, the Nikkei Evening News specified.
Besides clearing away hurdles for shipments of materiel and fuel by Japanese companies, Toshihiro Nikai, Japan's economy, trade and industry minister, promised in late February to consider providing public funding, possibly in the form of soft loans from the Japan Bank for International Cooperation or insurance by Nippon Export and Investment Insurance, a state-sponsored export credit agency, to support Vietnam's nuclear project.
Japanese players seem to have the inside track in the race to obtain the building contracts, which are estimated to worth about 1 trillion yen ($10.6 billion) in total. Yet, other power companies such as Westinghouse in the United States, France's nuclear giant Areva, Russia's AtomStroyExport and China's Guangdong Nuclear Power Group have also approached Vietnamese officials to express their interest in the project.
China Guangdong Nuclear Power Group revealed earlier this month on its Web site that it had signed a letter of intent with the state-owned power holding company Electricity of Vietnam about the construction of a nuclear power plant in Ninh Thuan, a southern coastal province. The Chinese company said it had submitted a feasibility study for the plant for government consideration. The letter of intent is a preliminary agreement and is not legally binding.
The National Assembly in Hanoi is scheduled to discuss and approve the nuclear cooperation deal with Japan in May.